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March 29, 2019

Advising With AI: A New Approach

Summary:

If AI can substantiate what a business adviser recommends, if that recommendation is brief yet bold, an insurer can succeed.

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If actuaries are the elite of the insurance industry, members of a licensed class whose workaday language is intelligible to few but influential to many, then business advisers are the interpreters of a separate yet equally important language: data. More to the point, business advisers are an independent class—hence their advisory role—in which they do much more than translate data into reports. They use artificial intelligence (AI) to find intelligence worth analyzing. They use intelligence to advance wisdom, because it takes skill to convert ones and zeros into a message that is as concise as it is compelling; it takes a different class of advisers to actualize a future that is close but hard to see; it takes verbal facility and visual acuity to present the future—to make the future present—for the insurance industry.

AI is a tool to accelerate the future. That future depends on business advisers who can explain why what seems possible is not only probable but inevitable: that AI answers the needs of insurers. Making the answers accessible—proving the answers are right—is an issue of talent, not technology.

According to Nick Chini, managing partner of Bainbridge, AI augments the models actuaries develop and business advisers deliver. Which is to say actuaries theorize scenarios—they quantify what may happen—while business advisers qualify how things will likely happen; how a business adviser infers what will happen; how the inferences a business adviser draws are the result of his fluency in data; how his education is more extensive, his expertise more expansive, his experience more exhaustive than that of a typical adviser. He is atypical, in a good way, because he represents the future of business advisory services. He may have a doctorate in linguistics or degrees in finance and computer science. He may be a former professor or a career academic.

To paraphrase Chini, what matters most is a business adviser’s ability to advise: to add value by abandoning generalities—to stop generalizing, period—and offer specifics about the future direction of the insurance industry and the course insurers should follow. In this situation, AI acts like a compass. It points the way, telling a person where to go without revealing how or when that person should start his journey.

See also: What to Look for in an AI Partner

For an insurer to begin that journey, he must know the advice he receives is right. To advise, then, is to communicate—to communicate with clarity and conviction—so an insurer has no reason not to do the right thing, so an insurer believes in the rightness of his decision, so an insurer knows he is right.

If business advisers can further what is right, to get insurers to more easily and expeditiously do the right thing before challenges arise, the insurance industry will benefit as a whole. If AI can substantiate what a business adviser recommends, if that recommendation is brief yet bold, if that business adviser can prove his recommendation is right, an insurer can succeed.

Let us welcome the chance to read—and endorse—these recommendations.

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About the Author

Lewis Fein writes about law and public policy, among other things. His commentary has been featured on CNBC, KABC Radio, Fox Business News and elsewhere.

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