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Artificial Intelligence and Insurance Appraisal

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Insurance appraisers play an indispensable role in the appraisal process. While appraisers have traditionally been human, artificial intelligence (AI) now threatens to transform this key element. Although most laws and regulations still envision appraisers as human, AI may eventually displace human appraisers, at least in part.

The new French law on arbitration issued by virtue of Decree No. 2011–48 of 13 January 2011, explicitly endorsed the universal presumption that an arbitrator cannot be but human. Article 1450 of the French Code of civil proceedings states, ‘Only a natural person having full capacity to exercise his or her rights may act as an arbitrator. If the arbitration agreement names a legal person, the latter has only the power to organize the arbitration’. The new French  Law, for example, presumes appraisers must be human. It does not allow an AI system to fully act as an appraiser. At most, AI can organize the appraisal process but not assess the case or determine a valuation. The law aims to limit, contain, and restrain the role of AI. Many other countries have adopted similar rules.

Most insurance appraisal laws still view the appraiser as human. It is difficult to consider an appraiser as an AI system, even one created by humans. Humans and AI may achieve similar logical and rational assessments, but only humans demonstrate a sociological perspective and can properly weigh factors involving human judgment and experience.

The criteria for selecting insurance appraisers are primarily human qualities: competence, intelligence, diligence, availability, nationality, integrity, experience, language skills, industry knowledge, willingness to devote sufficient time, legal qualifications, independence, and impartiality. Given these qualifications, relying on AI seems unrealistic. AI cannot replicate human emotional and sociological capabilities. For now, the world has not reached a stage of fusing humans and AI.

Insurance appraisers remain human. But the future may bring sophisticated AI systems that are self-aware, evolving, and able to exhibit human-like traits. This could partially or fully replace human appraisers, though human appraisers currently remain essential to proper insurance appraisal. AI may eventually challenge and change this reality.

While insurance appraisal still depends on human appraisers, AI threatens to transform the process. Laws and regulations largely still presume appraisers must be human, but AI may eventually displace human appraisers, at least to some degree, as technology progresses. For now, human judgment and experience remain indispensable to insurance appraisal, though AI will likely challenge this position in the coming years.


This was an excerpt from a white paper by Thomas Di Sieno, of Digitory Solutions, Inc.

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