Artificial intelligence (AI) is set to transform the insurance industry, but will not lead to mass redundancies, according to an insurtech founder.

Catriona Wallace, CEO and founder of listed machine-learning company Flamingo Ai, told the Australian and New Zealand Institute of Insurance and Finance (ANZIIF) Insurtech Conference in Sydney yesterday there is no need to fear the new technology.

She says AI will increase efficiency and spark revenue growth, but is not likely to result in large-scale redundancy.

The audience heard that by 2026, 40% of financial services jobs will be automated by machines. And in just two years 30% of all customer interactions will be handled by a machine.

“The machines are here, the robots exist and in insurance can do some really good things,” Dr Wallace said.

“It is the fastest growing technology sector in the world. There was $7 billion invested last year, and it will grow 12-fold in the next five years as organisations start to really ramp up their AI capability.”

Dr Wallace says AI has been compared to the invention of fire and the discovery of electricity.

“It is not a disruptor but a transformative power.

“AI is not just an analytics tool that helps underwriters make better decisions, but can… answer a question, sell an insurance policy, and conduct a claim.”

Dr Wallace says when the financial services industry started to send jobs overseas there was “great panic” about the loss of local jobs.

But she says this did not occur, and predicts it will be the same with AI.

“Every time we have been at a time of history like this, there hasn’t been great job loss and new jobs are created.

“I can’t say it won’t happen in future, but we have not had any experience of any job loss at all around our clients in insurance.

“People are not made redundant or released they are actually just freed up to do other work.

“Customer experience is still not great with insurers and banks, and there is so much that you would love to do if your people were freed up for other types of customer care or complaints handling.

“We have an obligation as an industry to make sure that people who are displaced from jobs because of the coming of artificial intelligence are either retrained or given opportunities elsewhere.”

The ANZIIF event is Australia’s premier insurtech conference and the only one backed by Insurtech Australia and Insurtech NZ.