Last fall provided a steady flow of disasters.
There were riots in Virginia over the removal of Confederate monuments, triggering disputes over monuments across the South.
Fires burned across three Northern California counties, leaving thousands homeless.
Three hurricanes ravished Houston, Florida, the Virgin Islands and Puerto Rico. FEMA pled "lack of money" while residents of Puerto Rico and the Virgin Islands went without water and electricity for more than a month.
A small Montana power company was retained to restore power in Puerto Rico, while hundreds of linemen responded to Florida and Texas.
Hacking of Equifax
But the biggest disaster, which was not announced until autumn, occurred months earlier with the hacking of Equifax. Over 145 million people were affected when their information was stolen, including social security numbers, driver's licenses and credit card numbers. It was months before we found out. Meanwhile, who was busy purchasing all of that data?
Our government is offering millions to create an "artificial intelligence" that would allow the military to read the minds of our enemies. Meanwhile Amazon is offering Echo (Alexa); gismos that answer questions and provide information in our homes. Who knows what else those devices are capable of doing? George Orwell's 1984 is perhaps a few decades late, but Big Brother is listening and watching.
Is artificial intelligence good or bad for us?
As an admitted "luddite," I suspect many of us have become captives of I-things. We just push a few buttons, hit the "buy" key, and it is delivered two days later, or maybe that same day by drone. If you work in a store as a salesperson, a robot in a warehouse that selects the desired item and puts it on a conveyor belt could replace you. The only ones still employed will be delivery drivers.
For the claims profession, artificial intelligence (AI) will leave many on the unemployment line. Satellite photos or TV monitors will film auto wrecks, damaged houses, the extent of floods and more, with everything handled by AI computers. Settlements will be by direct deposit. No need to go and look; if the insurer needs more information, it will send a drone to take more photos.
There have been pre-AI tools in the past, and they've hurt as much as they have helped. One involved voice analysis lie detectors, where a recorded statement went through a device that could detect falsehoods in the speaker's voice. I researched this when it first came out in the 1970s, and more than two-thirds of state insurance regulators said they would consider its use an "unfair claims settlement practice."
The other third hadn't heard about it, but suspected the same opinion would be the case. AI gives no guarantee that it will always operate in "good faith." AI has no faith, good, bad or otherwise.
Good or bad advice?
Last October, an article on PC360 by attorney Benjamin J. Carroll, suggested ways to protect insureds "against the dangers of a recorded statement," warning that insured's statements "can jeopardize your case from day one," because it is discoverable in litigation. But taking statements, written or recorded, has been the role of adjusters for centuries.
How else can an adjuster make correct decisions? Yes, a recorded statement could be res gestae in litigation, but a well-handled claim should not end in litigation. If the insured committed a tort, it is better to know it early, and settle the claim before the lawsuit is filed.
If insurers stopped taking statements — and written, signed ones are better than recorded — they will spend more defending lawsuits than they would settling owed claims. Besides, it won't be long before Alexa (Echo) gets subpoenaed to disclose what the insured said at home that the gismo heard and remembered.
Ken Brownlee, CPCU, (kenbrownlee@msn.com) is a former adjuster and risk manager based in Atlanta, Ga. He now authors and edits claims-adjusting textbooks. Opinions expressed are the author's own.
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