Artificial intelligence and machine learning: implications for insurers

Financial cybersecurity, Innovation and technology, Financial Strategy
/ Insurance and Asset Management

Insurance Governance Leadership Network, July 2019

Artificial intelligence (AI) is rapidly becoming an important technology in the insurance industry, as firms and their regulators investigate its potential and come to grip with its risks. While most boards are discussing AI, many are still in the early stages of understanding the technology and deciding how to oversee its strategic risks and opportunities. Regulatory frameworks and norms around the use of AI are evolving rapidly, and a variety of stakeholders—policymakers, industry groups, and civil society organizations—are trying to influence the agenda. Insurance Governance Leadership Network (IGLN) participants broadly agree that despite the potential for hype or unrealistic expectations, the impact will be significant. One participant said, “It has the potential for transformative changes, for resetting the business, for making big decisions in both property/casualty and life. You will be able to manage massive aggregates of data and use it to make better decisions.”

On May 30 in London and June 10 in New York, 2019, IGLN participants—directors, executives, regulators, and experts—met to discuss AI and its implications for the insurance sector. Drawing on discussions held during and leading up to those meetings, this ViewPoints explores the following themes:

  • AI and its capabilities

  • Implications of AI for the insurance sector

  • Governance and oversight challenges