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Entering the Chinese Room – AI, the insurance sector and the future

By Laurence Pipkin, ACII, Chartered Insurance Underwriting Agent, Managing Director

(Estimated reading time: 3 minutes 33 seconds)

The developments in Artificial Intelligence during the last five years have been staggering, previously the term AI has been used liberally often with little understanding behind it. Algorithms have been used for centuries to programme calculations on stone tables in Babylonia to more recently computers – all with the aim or making our lives easier and increase our own efficiency and productivity.

Most algorithms are exclusively built and managed by their creator; the intelligence rests with these controllers and not with the programme or machine itself. However it is clear with the developments in machine learning – where computers effectively design and deliver their own algorithms to solve problems – we are stepping away from the human control of the process and allowing the artificial intelligence to truly shape the process.

In the last 18 months with the release of Chat GPT and Microsoft Bard amongst many other AI powered chatbots there is no doubt that accessibility and awareness of AI has exploded in the consciousness of the general public. By now I’m sure we have all encountered a chatbot on an insurance website and, most of the time, this has improved the experience and felt like speaking to a real person.

The Turing Test is a very well-known concept to test a machines ability to exhibit intelligence equivalent to a human. The test was proposed by Alan Turing in 1950 in order to consider the question ‘Can machines think?’ This involved a series of text-based questions being asked to a computer in one room and a real person in the other. If the individual asking the questions could not tell which room contained the person, the computer would have passed the test.

A more recent concept proposed in 1980 by John Searle is The Chinese Room thought experiment. This proposed a situation where a computer exists in a room and is able to understand Chinese language symbols as input and submit Chinese language symbols as output.  John Searle suggests if someone outside the room was sending questions to the computer inside the room then the computer may pass the Turing Test if the computer has made appropriate responses to the questions asked. However, does the machine literally “understand” Chinese? Or is it merely simulating the ability to understand Chinese. Searle calls the first position “strong AI” and the latter “weak AI”.

The Chinese Room has inspired much discourse and disagreement in the wide field of cognitive science for the past 40 years by focusing on concepts of understanding and consciousness as proof of true Artificial Intelligence.

Whatever your potential view of what represents true AI, the challenge for business leaders is to harness the benefits it can provide to improve processes and service for customers. Traditional human-managed algorithms still present opportunities to control efficiency and generate good end results but lack the agility and speed of finely tuned AI systems which can learn as they go and therefore improve from each experience they encounter.

Ultimately, decision-making can enhance and be improved by AI, but does it matter if the person outside the room believes the decision was made by a person or a computer? The TV series ‘Little Britain’ used “computer says no” to comic effect – however this is not so funny if you are on the wrong side of a real-life decision

As AI continued to advance both in complexity, reliability and accessibility we will encounter more difficult problems to consider from a legal standpoint but also from an ethical standpoint. Do you know who you are dealing with at any point? When the door opens would you be surprised to see who was on the other side?

The use of AI in videos to present fake content involving celebrities offers the prospect of continual content from long gone and beloved performers in the future but also the risk of individual images being used for fraudulent and damaging purposes.

We are living at the cusp of a frontier that comes with incredible risk but also the chance to shape our future in a positive way. How we may harness this potential and manage this risk is a challenge which is now moving from beyond conceptual to practical risk management.

At Temple we are determined to utilise cutting edge technology to improve the experience of our customers but we are committed to always providing access to the decisions makers responsible for our underwriting now and for the years to come.

If you have any observations on the potential impact of AI in relation to legal expenses insurance and litigation funding, please email .

Laurence Pipkin

Managing Director
Read articles by Laurence Pipkin

Laurence Pipkin

Laurence started at Temple Legal Protection in 2006 where he was IT Manager until 2017, when promotion to Operations Director saw him join the board of the company. This was followed in June 2019 with his appointment as Managing Director to succeed Chris Wait, the founding MD. Following in those footsteps was a challenge relished by Laurence, and one with the full support of Chris, who became Chairman of the board of directors.

Laurence’s hands-on experience at the heart of the business running the IT systems over many years and his proven expertise in a fast-moving ATE/litigation insurance market has contributed to the respected position in the market place Temple now occupies.

Resting on laurels is not Laurence’s style. His passion and determination to provide market-leading legal expenses insurance products and a total commitment to customer service for partner law firms and brokers put him in the ideal position to lead the business.

Prominent litigators, contemporaries and colleagues speak of Laurence’s sound commercial judgement, technical excellence and agility in product development – all backed by a commitment to robust underwriting principles. This has led to Temple building long-term commercial relationships with leading law firms in the commercial litigation, clinical negligence and personal injury sectors.

Laurence is a Chartered Insurance Underwriting Agent, and associate member of the Chartered Insurance Institute.


Read articles by Laurence Pipkin