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Insurance upgrade


The AI advantage.

NO LONGER THE STUFF OF SCIENCE FICTION, artificial intelligence is quickly becoming a regular part of our daily lives – and you may not even realize it. Every time you ask your online virtual assistant service a question, that’s artificial intelligence in action. Relying on recommendations from your movie streaming service? Again, that’s the power of AI.

In a nutshell, artificial intelligence is advanced computer software programmed with sophisticated behavioural algorithms that adapt to the information they gather. Depending on the AI application, those algorithms may be programmed to monitor what we like and don’t like to help with recommendations on things like movies, television shows, restaurants, vacations, home decor purchases and even groceries. 

Improving the customer experience

Increasingly Canadian companies are using this sophisticated computer programming to offer better value to their customers – including in the insurance industry. Karen Cutler, chief underwriter for Manulife Canada, says faster decision making is at the heart of improving the customer experience.

“There is a huge speed advantage because of the sheer capabilities of artificial intelligence,” says Cutler. “AI can make decisions in seconds, versus a human who needs to review every piece of paper or online screen of an application process.”

Once seen as slow, boring and old-fashioned, Canadian insurance companies are now at the forefront of adopting artificial intelligence, while online applications are becoming shorter and more personalized, and can be filled in when it’s convenient for the client.[1]

AI systems for life insurance applications are trained using thousands of existing policies that have been processed by human underwriters. The systems are constantly learning, and the end-user experience keeps improving. 

“We are driving towards an easier application process with an AI system that is learning to become more intuitive,” says Cutler. “Rather than a standard 38-page form used by everyone from toddlers to seniors, the technology will quickly refine the application process based on answers provided.” 

For example, a man wouldn’t be asked questions related to pregnancy, and someone with diabetes may have more questions to answer than another person with no major health conditions. It’s the ability to let the technology have a conversation with the customer that will also help to speed up the process. If more information is required, the system will ask the questions immediately.

Advisor advantage

Replacing humans with technology tends to be a major concern when the subject of artificial intelligence comes up. A 2017 report lends support to that concern, with as many as 50 per cent of Canadian jobs projected to be disrupted by automation in the next 10 years. But the good news is that there will be growing demand for “human skills” – that ability to actively listen and solve problems.[2]

Is there a risk for AI to replace the human factor within the insurance industry? Karen Cutler says no.

“Artificial intelligence is helping to free up our valued underwriters to focus on challenging cases, and this sophisticated technology handles the straightforward policies,” says Cutler. “In addition, advisors are still going to be front and centre, helping the customer determine what kind of product they need.”

Cutler adds that the advisor will always play a pivotal role. They aren’t just selling insurance, but rather the whole financial plan. 

“The advisor is a key part of the customer experience,” says Cutler. “Advisors are building the relationship and determining client needs over the long term. What we’re proposing with AI is a faster way for processing the necessary data required when a customer has an insurance need. This is helping to provide a better customer experience.”

As technology continues to transform the insurance industry, consumers can expect to see many more positive changes. Wearable devices are already becoming more commonplace, encouraging people to adopt healthier lifestyles while paying less for health insurance.[3] One day in the not-too-distant future, virtual reality may be the preferred method for communicating with your advisor or chatting with the customer experience team.[4]

Believe it or not, this is an exciting time to buy insurance. Thanks to AI and technological advancements in the industry, getting insurance is faster and easier than ever before. To learn about insurance products that are right for you, speak with your advisor. 

© 2019 Manulife. The persons and situations depicted are fictional and their resemblance to anyone living or dead is purely coincidental. This media is for information purposes only and is not intended to provide specific financial, tax, legal, accounting or other advice and should not be relied upon in that regard. Many of the issues discussed will vary by province. Individuals should seek the advice of professionals to ensure that any action taken with respect to this information is appropriate to their specific situation. E & O E. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Any amount that is allocated to a segregated fund is invested at the risk of the contractholder and may increase or decrease in value.


[1] www.insurancebusinessmag.com/ca/news/breaking-news/canadian-insurance-companies-at-the-forefront-of-ai-adoption-110077.aspx

[2] www.newswire.ca/news-releases/automation-to-impact-at-least-50-of-canadian-jobs-in-the-next-decade-rbc-research-677900483.html

[3] https://emerj.com/ai-sector-overviews/artificial-intelligence-in-insurance-trends

[4] www.iamagazine.com/strategies/read/2018/01/31/coming-soon-to-the-insurance-industry-virtual-reality


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