Artificial Intelligence – Balancing Opportunity and Risk

Artificial Intelligence has become one of the most talked about technologies of this decade. Artificial Intelligence – or AI – touches many parts of our daily life. Digital voice assistants answer our questions, robots at work take away some of the repetitive tasks we face and chatbots give us extra support when we need it. Speaking at Aon’s Insights Series Conference 2019 in Melbourne, Rajeev Khanna, Chief Technology Officer, Aon and Rakesh Padmanabhan, Senior Technology Executive – AI, ANZ discussed the opportunities artificial intelligence presents and the risks that come with harnessing the technology.

A new entrant to Aon’s Global Risk Management Survey 2019 that deserves attention is disruptive technologies. First added as new risk category in the 2017 survey, disruptive technologies has now moved from number 20 to number 14 [1]. In recent years, the wider use of disruptive innovation has dramatically transformed business thinking. As more and more organisations are adopting the Internet of Things (IoT) and AI-driven tools like machine learning and automated processes to improve operational efficiency and manage their supply chains, the concept of Industry 4.0 is turning into a reality.

For example, when embracing new and disruptive technologies and business models, organisations require “digital-ready” talents, which are often scarce internally and highly competitive to obtain externally. However, if organisations neglect the necessity to evolve their workforce, they will fail to innovate1 – and run the risk of being sidestepped or outmanoeuvred by their competitors.

What is Artificial Intelligence?

Artificial Intelligence is the science and engineering of making intelligent machines, especially intelligent computer programs. It is related to the similar task of using computers to understand human intelligence, but AI does not have to confine itself to methods that are biologically observable.

According to PwC’s Global Artificial Intelligence Study, artificial intelligence will result in over $15 trillion economic impact between 2019-2030. A report by the World Economic Forum says that 58 million jobs could be created because of artificial intelligence in the next three years alone [2]. Rajeev Khanna, Aon’s Chief Technology Officer, stated that:

“60 per cent of organisations believe that the biggest challenge in harnessing the power of artificial intelligence is the quality of data available and that having access to quality data will be the key differentiator”.

Implications to insurance

Since innovation means introducing something new or revolutionary to the market, one inevitably thinks of technology. In the digital age, Dave Power, an innovation expert suggests that one should look to disruptive technologies, such as artificial intelligence, blockchain or the IoT for opportunities to transform the current playing field. However, innovation can also be about small things or incremental changes, like creating original ideas, finding new ways to improve operational efficiency, or better communications with customers.

With the excitement and opportunity surrounding these evolving technologies, there is also potential for volatility and uninsured risk. Aon has been working to understanding these emerging risks and actively collaborates with the insurance marketplace to develop innovative risk transfer solutions for these risks.

Aon continues to look at how AI can increase efficiency by automating processes. Aon’s assessment solutions team recently explored the future of hiring and examined the impact AI is having on talent assessments and performance appraisals. AI-based machine learning will link diagnostics and training closer together for everyone’s benefit.

[1] https://www.aon.com/2019-top-global-risks-management-economics-geopolitics-brand-damage-insights/index.html

[2] https://www.forbes.com/sites/amitchowdhry/2018/09/18/artificial-intelligence-to-create-58-million-new-jobs-by-2022-says-report/#7f0a4c1c4d4b