Lloyd's report examines unanswered questions about AI risk liability
While artificial intelligence (AI) and robotics have helped insurers improve their operations and increase efficiency, it has also introduced new risks relating to trust, ethics, security and safety, a new Lloyd's report has suggested.
Lloyd's has published two new reports, 'Taking control: artificial intelligence and insurance' and 'Taking control: robots and risk', in collaboration with The University of Surrey, to analyse the risks associated with using these fast-developing technologies as well as their potential benefits.
As the world becomes increasingly automated, forcing underwriters to adapt and navigate a new risk environment, insurers are leveraging the potential of AI themselves to remain competitive, improve processes and increase efficiency.
However, as systems become more complex, the ambiguity and legal uncertainty around AI is contributing to unanswered questions around who is ultimately liable when something does go wrong. The report suggests that cyber breaches are also likely to have an even greater impact.
The second report investigates the impact collaborative robots or “cobots” have on the economy, and the subsequent risk implications for the insurance industry.
It says that in addition to millions of jobs being taken over by robots in the future, the adoption of cobots in factories could result in new risks to human co-workers, cyber-attacks and faults resulting in large business interruption and property losses, and potential leaks of intellectual property.
“Our world is becoming increasingly automated. Insurers have an opportunity to play a role in shaping the development of the AI and robotics and will no doubt be instrumental in providing solutions to some of the most complex risks associated with these technologies. Some of these risks have been well documented, however for insurers to respond appropriately, it is important that the benefits and opportunities of AI and robotics are properly understood," said Trevor Maynard, head of innovation for Lloyd's.
"The publication of these two reports aims to provide underwriters with guidance on best practice as well as insights into the short, medium and long-term potential of AI and robotics,” he added.
Attila Emecz, director of research strategy, University of Surrey, said: “Over the last few years there has been a revolution in the development of AI and robotics yet we are only just beginning to tap into the vast potential of such technologies.
"We are confident that these reports will help the insurance sector in developing new business models and ways of working that will deliver significant social and economic benefit to society.”
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