As the EU publishes the Ethics Guidelines for Trustworthy Artificial Intelligence, it is likely many aspects of this guidance will eventually become new regulations to govern how AI is being used across multiple industries and sectors.
There is little doubt that businesses and individuals alike will be touched by AI. As services become influenced by AIs, protecting users with insurance products will have to develop.
As AI can have such a profound impact on the people and businesses it influences, it must be used ethically and have full explainability to ensure bias is removed from the systems AI is a part of. For insurers, bias and unethical uses of AI is a real and present danger that must be addressed.
In their snapshot paper the Centre for Data Ethics and Innovation (CDEI) states: “Over time, the industry will need to engage with the public to reach a consensus on what constitutes a responsible use of AI and data, for example by deciding under what conditions it is acceptable to process data from social media platforms or to use algorithms to predict people’s willingness to pay higher premiums.”
With the rush to adopt AI technologies, businesses across the insurtech sector run a high risk that the systems they deploy are not being used with a clearly defined ethical stance.
And as IoT (Internet of Things) expands, the quantity of data (often highly personalised to a business or individual) must be handled with care to remove bias from claim management, for instance.
The insurance imperative
AI, when applied to insurance, is somewhat of a double-edged sword: On the one hand AI can make insurance claims more efficient using chatbots for instance and, enable insurance companies to better focus their products on the needs of their clients. However, AI can easily be used without full explainability, which can have direct consequences for claimants and the overall trust in the industry. If a claim is automatically rejected by an AI, is the insurer certain this is the correct decision?
Insurtech as it inevitably expands its use of AI, must do so with clear ethical guidelines. Regulators may force this, as the European Commissions is hinting, but insurtech should not wait. AI is a powerful tool that can transform the industry. These new tools, though, must be deployed in the right way. Ethics and trust should be at the core of every AI tool insurtech uses.