Artificial intelligence (AI) should be used to help advisers to do their jobs rather than replace them.
This is according to advisers Health & Protection spoke to following the release of a review led by Financial Conduct Authority (FCA) executive director Sheldon Mills into the impact of AI on financial services which found while the technology could help tackle the protection gap, it may also lead to more hyper-personalisation, making the market more opaque.
Enormous potential
Kristian Breeze, director of healthcare at Ascend Broking Group, told Health & Protection he thinks AI has “enormous” potential to help close the protection gap in improving engagement, identifying unmet needs and making advice and support more accessible.
But Breeze agreed that the review was right to highlight the risk of hyper-personalisation.
“If consumers are only ever shown a highly tailored version of the market, there is a danger that transparency is reduced and trust is eroded,” he continued. “Protection works best when people can understand the choices available to them and feel confident they are receiving fair value, not simply the outcome an algorithm has decided is most relevant.”
Transparency, oversight and good outcomes
Breeze further maintained that for the protection sector, responsible adoption of AI must be built on transparency, oversight and good customer outcomes.
“AI should enhance human expertise rather than replace it,” he continued.
“Firms need to be clear about how technology is influencing recommendations, regularly test for bias and ensure customers are not excluded or disadvantaged by increasingly sophisticated models.
“Used well, AI can help us reach more people and make protection more accessible. Used poorly, it risks creating a market that feels less visible and less understandable to the very consumers we are trying to protect.”
Over-use and under-use
Stuart Lowe, director of risk and protection at Broadway Insurance, agreed that AI can help close the protection gap.
“AI can identify client needs, but the dangers of it, it is not going to have a good understanding of the client and what policies are actually suitable for,” Lowe said.
“AI has a place within the industry, but I think potentially it’s going to be over-used by some and under-utilised by others.”
Careful balance
While Emma Thomson, chairwoman of the Protection Distributors Group (PDG), also thinks AI can close the gap, she warned that a careful balance needs to be struck in ensuring consumers are getting the right directions.
“For me, a lot of the benefits of helping to close the protection gap is helping in the advice journey,” Thomson told Health & Protection.
“So it can help advisers to cut some of their admin so they can actually spend more time talking to customers and also in terms of the ongoing servicing, helping them to be reaching out to customers far more regularly so that customers who are already in the protection space are getting communications to help them to make sure that their cover remains relevant and brought back into the conversation with an adviser where there have been changes.”
Real opportunities
Thomson added that AI offered some real opportunities for AI to help in the adviser space in particular.
“And if AI can help in the non-advised space, then yes of course,” she continued.
“If that’s going to help consumers get more direction in non-advised space with options that are suitable for them, then that’s not bad outcome, but it does need to be done very carefully to make sure that consumers understand that there is still an opportunity to have a conversation and actually get personalised, proper advice which AI is not going to deliver.”