Dive Brief:

• Fukoku Mutual Life Insurance is reportedly replacing some human insurance claim workers with an artificial intelligence-based system from IBM, according to Quartz, citing Japan’s The Mainichi.

• According to a Fukoku press release, the new IBM Watson-based system will scan records and automate the examination of a wide range of data about an incident to help the residual human workers process payouts more quickly.

• Fukoku said the system, which cost $1.7 million, will replace 34 human insurance claim workers starting this month. The company said it will save $1.1 million per year on employee salaries.

Dive Insight:

There have already been some concerns about AI’s potential negative impact on jobs. A recent Forrester report predicted automation supported by intelligent software agents will be on the rise in the next five years, accounting for the elimination of a net 6% of U.S. jobs.

But those concerns have primarily centered around blue collar jobs. This may be the first significant example of a company using AI to replace white collar workers. With AI set to expand rapidly over the next few years, there is potential we’ll soon see more white collar jobs replaced by AI systems.

While companies can potentially save large sums of money with such systems, it will be interesting to see President-elect Donald Trump’s reaction if companies begin making similar moves en masse. Trump opposes companies outsourcing jobs to other countries, but if U.S. companies are forced to move back onshore, they’ll need to do so at a low cost, and AI may help.

The Mainichi report also notes that at least three other Japanese insurance companies are considering investing in AI systems to automate tasks currently completed by human workers.