RANCHO MIRAGE, Calif. — Captive insurers can leverage new technologies and help organizations innovate, but those efforts must be aligned with the parent company’s strategic goals, experts say.
They spoke Monday during a session at the Captive Insurance Companies Association 2023 International Conference.
Artificial intelligence and machine learning technologies can offer inmates positive ways to reduce risk, said Mark Field, director of the risk and insurance operations team, office of the general counsel at Sutter Health, a health care system based in Sacramento, California.
For example, ChatGPT, an artificial intelligence chatbot developed by OpenAi, has amassed 1
00 million users, based on news reports, Mr. Field.When he went online and asked the chatbot what innovations artificial intelligence will bring to the insurance industry and how artificial intelligence can help captive insurers, it returned an answer in about 15 seconds, he said.
Captives may be able to apply AI techniques in the areas of fraud detection, claims processing and underwriting, he said.
“I don’t think, and I don’t hope for all our sakes, that we will be replaced by robots or AI, but maybe there is an advantage or opportunity,” to apply these types of technologies, Mr. Field said.
AI tools have limitations, said Deyna Feng, director, captive programs, for Columbus, Indiana-based power engineering company Cummins Inc., noting that they can incorrectly answer questions about simple calculations.
It will take time for AI technologies to add value and using them in combination with humans brings a level of competence, she said.
“The value of a human is that you answer something, and you may wonder if it’s right or wrong, but for the robot it doesn’t matter as long as you get the answer that it’s competent to answer,” says Feng. said.
Captive boards and operations must align with the parent organization’s goals to move forward with innovation, said Heather McClure, Dallas-based chief risk officer, national healthcare practice, commercial risk solutions, at Aon PLC.
Establishing the captive as a partner with the organization’s innovation strategy, making sure it is known to the company’s board as more than just a tool to fund risk in a tough insurance market, is important, she said.
Captives also need to act as a source to enable innovation within the organization, rather than as a department that says “no,” she said.
Defining goals rather than using technology for technology’s sake is key, Mr. Field.
“Define your goal. If it’s technology-enabled, great, but don’t go out there and say, ‘OK, we’re going to come up with the best AI tool for what you want,'” Mr. Field said.
Whether the technology adds value and achieves an organization’s operational goals is critical, he said.
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