Compliance, customer expectations are most significant challenges for chief AI officer

It wasn’t too long ago that using artificial intelligence (AI) to greatly enhance human ability was the stuff of futuristic speculation.

For global companies like Davies, AI is now an indispensable part of business strategy. The specialist claims and professional services provider recently appointed Paul O’Brien (pictured) as its first group chief AI officer, a move that solidifies its intent to harness the technology for growth.

O’Brien spoke to Insurance Business about the key AI initiatives Davies plans to roll out across its multinational operations.

The biggest challenges chief AI officers like him face? Compliance and meeting customer expectations.

“A key consideration for us is ensuring we fully understand regulatory obligations across different regions,” said O’Brien, who also serves as chief technology officer in global solutions for the organizations.

“In the UK, the frameworks for AI are more advanced, but in North America, there’s significant variation in AI regulations across states.”

Beyond meeting regulatory requirements, O’Brien also highlighted the challenge of aligning its enhanced capabilities with client expectations.

“We have a diverse range of clients, each with a different appetite for AI in their claims process,” he said. “As AI capabilities evolve, it’s important to bring our clients along on the journey, adjusting the use of AI to suit their specific needs.”

Keeping up with exciting innovations in AI

In a personal capacity, O’Brien said his main challenge was keeping up with the

rapid shifts in AI. “When we started discussing AI a year ago, the capabilities were very different,” he reflected. “The rate of change and making sure we stay in touch with it, understanding the positives and negatives for the business, is definitely a concern.”

A key example of this was the emergence of AI-generated video and voice, which could soon become widely accessible. “Imagine being on a Teams call a year from now and not knowing if it’s really me or AI-generated in real-time,” O’Brien illustrated.

There are also concerns about AI being misused, particularly in areas like fraud. O’Brien emphasizes the need for businesses to understand both the positive and negative impacts of AI, and to implement appropriate safeguards.

As AI continues to evolve, O’Brien is cautious but optimistic about its role in business. The initial fear that AI would replace human jobs has largely been tempered by the realization that AI is more about augmentation than replacement, though he noted that the current state of AI shows it’s not yet a “finished product.” Challenges like hallucination in large language models show that AI still has limitations.

For now, regulatory frameworks provide the necessary guardrails to ensure that businesses like Davies implement AI in a way that is both innovative and responsible.

“While regulation can be seen as a potential slowdown to innovation, I think that’s actually a real positive,” O’Brien said.

Davies’ AI strategy – what does the organization aim to achieve?

When generative AI started gaining momentum, notably with the rise of ChatGPT in the public sphere, it became clear that AI would change the game for Davies.

“We recognized its significant impact on our operations and saw the need to reassess our AI strategy for the future,” said O’Brien.

As a private equity-backed business undergoing rapid acquisitions, Davies needed to look inward at its AI capabilities, especially considering the wide range of industries it serves, from insurance to consulting to forensic accounting. The early task, according to O’Brien, was simple but crucial: “What are we doing in AI?”

He quickly discovered that various departments within Davies were already engaging with AI to some degree. “We were doing lots of automation and AI-type activities, they just weren’t necessarily all talking to each other,” O’Brien said.

If they were to maximize the potential of AI across the organization, Davies needed to unify their efforts under a centralized strategy. This is how the group chief AI officer role came into being.

“The role grew out of that need to ensure we have a holistic view of everything going on in AI,” O’Brien explained, “and to make sure we’re delivering the best results for our clients and ourselves.”

Davies’ AI strategy is divided into three pillars: compliance and sustainability, business optimization, and product enhancement.

The company is exploring several projects to enhance its products and services:

1. Continuing to develop its Laurie platform, which is part of Davies’ claims processing solutions, and incorporating more AI capabilities into it
2. Building AI features into Davies’ SaaS platforms
3. Leveraging generative AI tools like ChatGPT to enhance internal productivity and efficiency, such as by automating tasks like document analysis and meeting summarization
4. Developing generic AI capabilities like document ingestion and understanding, and then implementing those across multiple Davies products and services to drive efficiencies
5. Exploring the use of AI-generated video and voice, while also being mindful of the potential risks and impacts these technologies could have on the business, such as in mitigating fraud.

Davies’ key focus is using AI to augment and empower Davies’ employees and clients, rather than replacing them, and doing so in a safe and compliant manner.

“What excites me most about AI right now is how it’s augmenting, rather than replacing, people,” O’Brien said. “There were fears it would replace jobs. But what we’re seeing is AI helping people work more efficiently. For example, in areas where teams deal with large documents or vast amounts of data, generative AI is ideal for quickly locating specific information, like clauses in legal contracts. It streamlines workflows, making tasks easier and more manageable.

“As employees become more familiar with generative AI tools like ChatGPT in their personal lives, they expect to use similar tools at work. Giving them access to these capabilities in a safe, controlled way is fantastic.”

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