A company in Japan is making 34 employees redundant in order to replace them with IBM’s Watson Explorer AI.

More than 30 employees are being laid off and replaced with an artificial intelligence system that can calculate payouts to policyholders.

Fukoku Mutual Life Insurance believes it will increase productivity by 30 per cent and see a return on its investment in less than two years.

The firm said it would save about 140m yen (£1m) a year after the 200m yen (£1.4m) AI system is installed this month.

According to the tech firm that created the Watson Explorer, the artificial intelligence system has “cognitive technology that can think like a human”.

It can also analyse and interpret data, “including unstructured text, images, audio and video”, meaning it can analyse all manner of medical data before calculating payouts.

AI is being trialed in a number of sectors in Japan, even in politics, where next month civil servants will be assisted by the system on a trial basis to help civil servants draft answers for ministers during cabinet meetings and parliamentary sessions.

The spread of AI isn’t limited to Japan; in the UK the NHS is trialing artificial intelligence as an alternative to the 111 helpline, and bosses have said AI is the next frontier for online retail.