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Remember AI chatbot Tay, which, less than a day from rollout in 2016, was able to learn racist remarks and was posting them on Twitter much to owner Microsoft’s horror?
This was just one of the cases Clyde & Co highlighted at a recent event in order to examine the impact of artificial intelligence on underwriting. Citing the financial threats that go along with the technology, the global law firm said London market underwriters will eventually have to review their policies in hopes of weeding out hidden AI exposure.
This undertaking is no different from the search for non-affirmative cyber exposures within non-cyber insurance policies. Clyde & Co partner Neil Beresford (pictured) said the hunt will be needed as we realise that AI can impact a wide range of risks in ways that had not been anticipated by underwriters.
“It’s becoming apparent that AI risk can affect a very broad range of insurance products including general liability, professional indemnity, and contractors cover,” noted Beresford. “This AI risk is not just being found in cyber products, it’s gone mainstream.
“And what’s giving rise to concern is that these policies containing hidden AI pose a greater risk than ever before. We’re now seeing claims in which interrupting an AI system’s functioning has caused massive financial losses.”
The law firm partner stressed that, with AI in the picture, utmost care must be taken when underwriters think about exclusions.
“When these AI-related claims occur, they are of a different order of technical complexity,” he said. “The insurance industry will need a suite of experts to understand how a failure has occurred and what caused it. Was it the hardware, was it the software, was it human intervention, or was it the logical – but morally neutral – response of the AI system to its environment?”
You’ve probably seen the phrase “the robots are coming” countless of times already… but perhaps the question is, is the insurance industry prepared to take on the risks? Let us know what you think by leaving a comment below.
