The insurance industry is currently facing a significant number of layoffs, sparking discussions about the role of Artificial Intelligence (AI) in reshaping employment within the sector. AM Best, a credit rating agency, points out that it’s premature to attribute these layoffs solely to AI, considering the industry is still in the early stages of AI integration. The U.S. Bureau of Labor Statistics data indicates a slowdown in hiring across insurance and related fields, with the numbers declining steadily from July to October.
The analysts at AM Best differentiate between cyclical and structural unemployment, suggesting that the current job cuts are more cyclically driven, related to business cycle changes rather than AI-induced structural shifts. Personal lines writers are among the most affected, with factors like loss cost inflation and rising climate risks impacting underwriting margins and loss ratios. On the other hand, AI is seen as a boon in automating certain underwriting processes in commercial lines, which are typically more labor-intensive.
Furthermore, AI is not just a disruptor but also a creator of new job opportunities in the insurance industry. Its potential extends to tasks like content creation, customer service, and legal document analysis. The analysts emphasize that while the full impact of AI on employment is uncertain, it is undeniably altering the work landscape, requiring current employees to adapt and harness the technology’s capabilities.