Even though AI brings a large number of risks for the insurance industry, it is already making significant inroads in increasing productivity. Insurers like Allianz have already embraced the technology to help with weather alerts, or even claims processing. “AI enables insurers to enhance their value proposition by better predicting and therefore preventing risks,” said Michael Bruch, Global Head of Risk Consulting Advisory Services at Allianz Commercial.
As the rush towards the use of Large Language Models accelerates, UK unions have announced that they expect the industry to help works affected by the technology. At the upcoming Trades Union Congress (TUC) to be held in Brighton next month, unions will urge financial services companies to invest in large-scale reskilling programs to prepare their workforce for the impacts of AI.
Accord, representing banking employees, plans to advocate for a "major" reskilling initiative targeting the nearly 2.5 million workers in the UK's financial services sector. This motion, which will be presented at the labour movement’s annual conference, highlights the potential disruption AI could bring to the industry.
A report from Citigroup issued in June emphasized that automation could threaten up to half of banking jobs.“Congress notes with concern a report from June 2024 stating that up to 54 per cent of banking jobs and 48 per cent of insurance roles could be displaced by AI in the future,” the Accord motion reads. “AI-driven job displacement is predicted to be higher in financial services than in any other sector of the economy,” it adds, reflecting the growing unease within the industry.
Sharon Graham, the general secretary of Unite, one of the largest unions, expressed her concerns to the Financial Times, stating that the UK is “falling behind” and must embrace “new technologies.” She emphasized the need for a collaborative approach involving government, employers, and unions to avoid the potential pitfalls of AI, such as unemployment and inequality.
As AI continues to advance, insurance companies may face the dual challenge of adapting to new technologies while managing the implications for their workforce. The TUC conference in early September will see union leaders pressuring Labour ministers to implement regulations governing the use of AI by employers. Among the key issues to be debated are transparency, worker protections, and the ethical deployment of AI.
The growing adoption of AI in the insurance sector has sparked concerns about job security, with experts predicting significant changes in how roles are managed. The motion by Accord is just one of four related to AI that will be discussed at the conference. Any motion passed will become official TUC policy, potentially influencing future legislation and industry practices.
The broader implications for the insurance industry are profound. As AI technologies become more prevalent, companies will need to navigate a landscape where automation could lead to substantial job displacement. The industry's response to these changes will likely involve a mix of retraining initiatives and strategic planning to ensure that employees can transition into new roles created by technological advancements.
Last year, the TUC proposed a blueprint for regulating AI in the workplace, which included legal rights for workers to be informed about AI use and protections against unfair dismissal. TUC assistant general secretary Kate Bell underscored the urgency of such measures, noting that AI is already making "life-changing calls" in areas like hiring and firing.
Insurance companies, which operate in a highly regulated environment, are taking cautious steps towards AI adoption. Jana Mackintosh, managing director of payments, innovation, and resilience at UK Finance, stated that firms are not only hiring in the AI field but also focused on upskilling their workforce to apply AI responsibly.
The industry will be carefully watching both the conference, and to see whether the new government will try to legislate and restrict the industry’s ability to embrace this promising new technology.
