Artificial intelligence will be valuable in boosting productivity, but its level of sophistication doesn’t yet deliver the insights and understanding of human expertise, the World Insurance Congress Australia has heard. 

Liberty Specialty Markets Asia Pacific Head of Casualty and Professional and Financial Risks Marcus Thomas says AI will be revolutionary in generating operational efficiencies and enhancing analytics, but additional capabilities are needed for insurance decision making. 

“I don’t think it will replace the expertise in the property and casualty market in the short-to-medium term,” he said in a keynote address at the conference last week. “There is too much of having to read the animal spirits, and I don’t think artificial intelligence is there yet.” 

Mr Thomas says in an age where economic productivity has stalled, AI is a welcome development, but at the same time personal expertise will be even more valued in drawing on experience, understanding human nature and assessing potential changes, such as in the regulatory environment in looking to the future. 

“You are a fool if you ignore the past and past history, but what I also can guarantee is that it will be the same but different,” he said. “I am not sure artificial intelligence is there, to be able to work through that ‘what’s different’ bit.”  

Expert panels at the conference also discussed cyber security challenges and exclusions and impacts from AI as it becomes more widespread. 

Lander & Rogers Head of Cyber Insurance Melissa Tan says challenges include “deep fakes” that make it difficult to tell what is real and that AI is changing the nature of phishing. 

Insurance issues also arise from identifying where attacks fall on a spectrum ranging through criminal acts for financial gain, through terrorism, state-sponsored activities and acts of war, which aren’t covered given the extent of the risk. 

“As an insurance industry we need to first understand what are we willing to cover, what do we have the capacity to cover and what kind of innovative solutions can we have, to have the capacity to back up to that point where we decide we can no longer cover it,” Ms Tan said. 

Cyber technology has given increased power to individuals as well as some nations and has blurred lines, she told the conference. 

“Cyber space has really upended our understanding of conflict, in terms of the dichotomy of war and peace,” she said.  

“It is a place where there is no peace and it is a place where there is a lot of possibility for conflict, and I think in order for the insurance industry to deal with a risk like cyber, you need to rethink the concept of conflict.”