Lemonade: This $5 billion insurance company likes to talk up its AI. Now it’s in a mess over it

Confusion about how the corporation procedures coverage promises, triggered by its preference of phrases, “led to a unfold of falsehoods and incorrect assumptions, so we are writing this to explain and unequivocally confirm that our people aren’t treated otherwise based on their overall look, habits, or any individual/actual physical attribute,” Lemonade wrote in its web site article Wednesday.

Lemonade’s initially muddled messaging, and the general public reaction to it, serves as a cautionary tale for the escalating selection of firms internet marketing on their own with AI buzzwords. It also highlights the challenges offered by the technology: While AI can act as a promoting place, these types of as by dashing up a ordinarily fusty process like the act of having coverage or filing a assert, it is also a black box. It can be not constantly obvious why or how it does what it does, or even when it is remaining utilized to make a final decision.

In its website put up, Lemonade wrote that the phrase “non-verbal cues” in its now-deleted tweets was a “terrible decision of text.” Fairly, it mentioned it meant to refer to its use of facial-recognition technology, which it relies on to flag insurance policies statements that one person submits under much more than just one identity — statements that are flagged go on to human reviewers, the organization noted.

Wissner-Levy instructed CNN Business enterprise that AI Jim is a “branded time period” the enterprise takes advantage of to converse about its statements automation, and that not everything AI Jim does utilizes AI. Though AI Jim makes use of the engineering for some steps, these kinds of as detecting fraud with facial recognition application, it employs “very simple automation” — effectively, preset regulations — for other duties, this kind of as identifying if a customer has an energetic insurance coverage policy or if the sum of their declare is less than their insurance coverage deductible.

“It can be no secret that we automate declare managing. But the decrease and approve steps are not performed by AI, as stated in the blog publish,” she stated.

When requested how consumers are intended to fully grasp the big difference involving AI and straightforward automation if both equally are completed beneath a products that has AI in its title, Wissner-Levy reported that though AI Jim is the chatbot’s identify, the corporation will “by no means let AI, in phrases of our synthetic intelligence, figure out no matter whether to auto reject a declare.”

“We will enable AI Jim, the chatbot you’re talking with, reject that centered on principles,” she additional.

Questioned if the branding of AI Jim is bewildering, Wissner-Levy reported, “In this context I guess it was.” She stated this 7 days is the initially time the corporation has read of the identify perplexing or bothering consumers.