What Insurance Jobs are Subject to Automation?

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What insurance jobs are likely to be automated sooner than later? It depends on the nature of the work being conducted, and the role within the organization. As automation increases, it’s not that jobs will be entirely eliminated, it’s more likely that jobholders will see the nature of their tasks shift away from repetitive tasks and toward people-oriented tasks.

In a recent report out of McKinsey, Michael Chui, James Manyika, and Mehdi Miremadi recently explored the question of job automation across a broad swath of industries. The bottom line: the more repetitive a task is, the greater the chance of automation. The more people-oriented or specialized, the lesser the chance of automation. The key, however, is “tasks,” and not “jobs” will be replaced.

We’ve already seen technology nipping at the edges of the insurance employment world. Online insurance offerings, for example, cut out the prospecting work of agents and brokers, though it also helps bring in leads at the same time. Rules engines have reduced the need for human underwriters to review every application submitted, at least during the initial phases of customer onboarding. Online self-service forms and image processing have reduced the need for large data-entry operations.

Since many insurance-related jobs are information intensive, and involve repeatable processes, there may be increasing job shifts due to automation. Data processing-related activities have a 69% percent probability of being automated in the near term, the McKinsey authors predict. Data collection-related tasks have a 64% chance of being automated.

However, two other sides of the insurance industry, management and applying specific expertise, will likely not be automated anytime soon. Those involved in managing people only have a nine-percent chance of being automated, while subject matter experts have an 18% of being replaced by automation.

The McKinsey consultants observe that organizations in the financial services and insurance sector have many task areas likely to see a great deal of automation. “A number of companies now offer solutions that automate entering paper and PDF invoices into computer systems or even processing loan applications. And it’s not just entry-level workers or low-wage clerks who collect and process data; people whose annual incomes exceed $200,000 spend some 31% of their time doing those things, as well.”

As a result, even high-level jobs may see a shift in the types of tasks required. In the financial services and insurance world, they continue, there’s a great reliance on professional expertise: “stock traders and investment bankers live off their wits. Yet about 50% of the overall time of the workforce in finance and insurance is devoted to collecting and processing data, where the technical potential for automation is high. Insurance sales agents gather customer or product information and underwriters verify the accuracy of records. Securities and financial sales agents prepare sales or other contracts. Bank tellers verify the accuracy of financial data.”

As a result, the McKinsey consultants state, the financial and insurance sector “has the technical potential to automate activities taking up 43% of its workers’ time. Once again, the potential is far higher for some occupations than for others. For example, we estimate that mortgage brokers spend as much as 90% of their time processing applications. Putting in place more sophisticated verification processes for documents and credit applications could reduce that proportion to just more than 60 percent. This would free up mortgage advisers to focus more of their time on advising clients rather than routine processing. Both the customer and the mortgage institution get greater value.”

The hardest activities to automate, McKinsey observes, “are those that involve managing and developing people (nine percent automation potential) or that apply expertise to decision making, planning, or creative work (18%). These activities, often characterized as knowledge work, can be as varied as coding software, creating menus, or writing promotional materials. For now, computers do an excellent job with very well-defined activities, such as optimizing trucking routes, but humans still need to determine the proper goals, interpret results, or provide commonsense checks for solutions.”

There are plenty of jobs like that in today’s insurance companies as well.

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