AM Best does not believe artificial intelligence is the main cause of recent insurance industry layoffs.
In commentary released today, the credit rating agency wrote that “it is too soon to cite AI as the leading cause of the job losses, at least at this nascent stage.” Instead, AM Best said the layoffs likely fall into “the cyclical, rather than the structural, category.”
The rating agency explained that structural unemployment refers to jobs that are made redundant because of systemic changes and the adoption of technology, or a misalignment between business needs and employee skills. Cyclical unemployment refers to employment fluctuations driven by the business cycle, “which seems to be the case in the insurance industry,” AM Best said.
