AI is too risky to insure, say people whose job is insuring risk
In a significant move reflecting the growing concerns surrounding artificial intelligence (AI) and its implications for liability, major insurance companies such as AIG, Great American, and WR Berkley are seeking regulatory approval to exclude AI-related liabilities from their corporate insurance policies. This request highlights the uncertainty and potential risks associated with AI technologies, which are increasingly integrated into various business operations. Insurers argue that the outputs generated by AI models can be unpredictable, with one underwriter characterizing these outputs as “too much of a black box.” This description underscores the challenges that underwriters face in assessing risks linked to AI, as the lack of transparency in how AI systems make decisions complicates the evaluation of potential liabilities.
The implications of this development are far-reaching, as businesses across multiple sectors are rapidly adopting AI technologies to enhance efficiency and decision-making. However, the request from insurers reveals a significant gap in understanding and managing the risks associated with these innovations. For instance, if an AI system used in healthcare misdiagnoses a patient due to flawed algorithms, the liability for such an error could become a contentious issue. Insurers are concerned that without clear guidelines and frameworks for accountability, they may be exposed to unforeseen claims resulting from AI-related incidents. This situation emphasizes the urgent need for regulatory bodies to establish comprehensive policies that address the complexities of AI liability, ensuring that both businesses and insurers are adequately protected against the risks posed by these advanced technologies.
As the debate around AI liability continues, it also raises broader questions about the role of regulation in fostering innovation while safeguarding public interests. The insurance industry’s push to exclude AI-related liabilities could lead to a significant shift in how businesses approach the adoption of AI technologies, potentially stifling innovation if companies feel unprotected against the risks involved. Conversely, if regulators respond by creating a robust framework for AI accountability, it could pave the way for more responsible and transparent use of AI, ultimately benefiting both businesses and consumers. As stakeholders engage in discussions about the future of AI and liability, the outcome will likely shape the landscape of insurance and technology for years to come.
Major insurers including AIG, Great American, and WR Berkley are asking U.S. regulators for permission to exclude AI-related liabilities from corporate policies. One underwriter describes the AI models’ outputs to the FT as “too much of a black box.”
