News - AI creates new risks, even as it brings benefits to businesses - Allianz
Source: Asia Insurance Review | May 2018
The widespread implementation of artificial intelligence (AI) applications brings many advantages for businesses, such as increased efficiencies, fewer repetitive tasks and better customer experiences. However, in the wrong hands, the potential threats could easily counterbalance the huge benefits, as AI is vulnerable to risks especially cyber, said Allianz Global Corporate & Specialty’s (AGCS) The Rise of Artificial Intelligence: Future Outlook and Emerging Risks report.
As AI becomes more widely adopted and as societies and economies become increasingly connected, vulnerability to malicious cyber-attacks or technical failure will increase, as will the potential for larger-scale disruptions and extraordinary financial losses. Companies will also face new liability scenarios as responsibility for decision-making shifts from human to machine and manufacturer.
The report noted that insurers will have a crucial role to play in helping to minimise, manage and transfer emerging risks from AI applications. Traditional coverages will need to be adapted to protect consumers and businesses alike. Insurance will need to better address certain exposures to businesses such as cyber attacks, business interruption, product recall and reputational damage. New liability insurance models could be adopted in areas, such as autonomous driving, increasing the pressure on manufacturers and software vendors and decreasing the strict liability of consumers.
The insurance industry has been an early adopter of machine learning as it deals with lots of data and repetitive processes. “There is huge potential for AI to improve the insurance value chain. Initially, it will help automate insurance processes to enable better delivery to our customers. Policies can be issued, and claims processed, faster and more efficiently,” said AGCS’ head of emerging trends, Mr Michael Bruch.
By boosting data analytics, AI will also give insurers and their customers a much better understanding of their risks so that they can be reduced more effectively, while new insurance solutions could also be developed. For example, AI-powered analytics could help companies understand cyber risks better and improve security. AI could also assist insurers in identifying accumulations of cyber exposure and change the way insurers interact with their customers, enabling 24/7 service. A