How AI Could Affect the UK’s Employment Market


February 2024

How AI Could Affect the UK’s Employment Market

The Financial Times recently posted an article regarding how the increasing use of AI would most affect workers within the City of London, following a report provided by the Department for Education[1]. The intent of this report, published in November of 2023, was to quantify the impact of AI on the UK job market. The content details which professions and areas of the UK are most and least at risk of increased use of AI, estimating that up to 30% of UK jobs could implement some form of automation.

An AI Occupational Exposure (AIOE) scale (adapted by the Department of Education) was useful in  quantifying their results. The origin of the scale was to track how Language Modelers such as ChatGPT could affect occupations and industries[2], however the Department for Education adapted this to show data based on a larger set of AI applications. This first involves selecting ten common AI applications, which included image recognition and generation, reading comprehension, language modelling, translation and speech recognition. The next step was to map human abilities to job roles, and then assess the AI applications against those human abilities. From this, the AIOE scale ranks professions and areas to see what skills are most impacted by automation. The below table gives an overview of the outcome:

Most Exposure to all AI applications Least Exposure to all AI applications
Management consultants and business analysts Sports players
Financial managers and directors Roofers, roof tilers and slaters
Charted and certified accountants Elementary construction occupations
Psychologists Plasterers
Purchasing managers and directors Steel erectors
Actuaries, economists and statisticians Vehicle valets and cleaners
Business and financial project management professionals Hospital porters
Finance and investment analysts and advisers Cleaners and domestics
Legal professionals Floorers and wall tilers
Business and related associate professionals Metal plate workers, and riveters
Credit controllers Launderers, dry cleaners and pressers
Solicitors Window cleaners
Civil engineers Painters and decorators
Education advisers and school inspectors Fork-lift truck drivers
Human resources administrative occupations Packers, bottlers, canners and fillers
Business, research and administrative professionals Gardeners and landscape gardeners
Financial accounts managers Bricklayers and mason
Bookkeepers, payroll managers and wages clerks Road construction operatives
National government administrative occupations Elementary process plant occupations
Marketing associate professionals Tyre, exhaust and windscreen fitters


Further to this, the report provides the exposure of AI per industry, and then by geography – see below graphs.

As detailed above, the report and AIOE scale found that the finance and insurance sector is more exposed to AI than any other, due to the sector having a large number financial and clerical roles which have higher AIOE scores. Management consulting topped the list for occupation most affected by any form of AI application. Further,  call centre workers show exposure to large language models, such as ChatGPT.

The report stated that London is five times more exposed to the impact of AI than the North-East of England, but this appears to be due  to the concentration of professional occupations in the area.

Specific Effect on the Insurance Market:

AI has significantly impacted the insurance market by improving risk assessment, fraud detection, and customer service. Automated processes streamline claims handling, leading to efficiency gains. However, challenges include ethical concerns, data privacy, and potential job displacement.

In the insurance industry, AI has brought five transformative effects.

  1. Risk Assessment and Underwriting:

AI algorithms analyse vast datasets to enhance risk assessment accuracy. This allows insurers more precisely to price policies based on individualised risk profiles, leading to fairer premiums.

  1. Fraud Detection:

AI plays a crucial role in identifying unusual patterns and anomalies that may indicate fraudulent activities. This helps insurers combat fraudulent claims and minimise financial losses.

  1. Claims Processing:

Automation and AI-driven systems expedite claims processing, reducing the time it takes to settle claims. This efficiency enhances customer satisfaction and lowers operational costs for insurance companies.

  1. Customer Interaction and Experience:

Chatbots and virtual assistants powered by AI improve customer interactions. They can provide instant responses to queries, guide customers through the insurance process, and offer personalised recommendations, thereby enhancing the overall customer experience.

  1. Operational Efficiency:

AI optimises internal processes, automating routine tasks and allowing employees to focus on more complex and value-added activities. This efficiency can lead to cost savings and increased productivity.

However, challenges and considerations include:

  1. Ethical Concerns:

The use of AI in decision-making raises ethical questions, especially regarding bias in algorithms. Ensuring fairness and transparency in AI models is crucial to building trust.

  1. Data Privacy:

The insurance industry deals with sensitive personal information. AI’s reliance on data raises concerns about privacy, necessitating robust cybersecurity measures and compliance with data protection regulations.

  1. Job Displacement:

Automation through AI may lead to certain job roles becoming obsolete. Insurers need to navigate this transition thoughtfully, retraining or upskilling employees for new roles.

  1. Regulatory Compliance:

As AI becomes more integral to the insurance process, regulators need to adapt and establish frameworks that ensure responsible and fair use of AI technologies in the industry.

The integration of AI into the insurance market represents a significant evolution, optimising processes, improving risk management, and enhancing customer experience. Striking a balance between technological advancement and ethical considerations remain crucial for the sustainable and responsible growth of AI within the insurance industry. In summary, while AI brings substantial benefits to the insurance market, it requires a balanced approach that addresses ethical, privacy, and workforce considerations for sustained positive impacts.

Source(s): |Download full PDF here

[1]The Impact of AI on UK Jobs and Training – Department for Education Report (November 2023)

[2]How will Language Modelers like ChatGPT Affect  Occupations and Industries? (March 2023)