September 17, 2024
Triple-I and SAS
A new report explores cross-sector opportunities for insurers to influence the responsible development and use of AI and help establish regulatory best practices.
Artificial intelligence (AI) promises to revolutionize the way property and casualty (P&C) insurance is conducted. As a result, P&C insurers are uniquely positioned to advance the conversation about ethical AI, not just for their own operations, but for all businesses. How they could help establish cross-industry regulatory and technology best practices is the subject of a new report, AI pioneering ethics: the crucial role of P&C insurersspeak Insurance Information Institute (Triple-I)which is a subsidiary of The Institutes, and data and AI leader SAS.
In addition to the report, Triple-I and SAS presented a Pioneering Ethical AI Webinar September 12, 2024, available on-demand. Triple-I and SAS were joined by industry experts including Jennifer Kyung, VP of P&C Underwriting at USAA; Iris Devriese, Underwriter and Head of IA Liability at Munich Re; and Matthew McHatten, President and CEO of MMG Insurance.
“When it comes to artificial intelligence“Insurers must work alongside regulators to build trust,” McHatten said. “Carriers can add valuable context that guides the regulatory conversation while highlighting the value AI can bring to our policyholders.”
Webinar speakers discussed key takeaways from the report, including:
• AI regulation has already begun and will only continue to develop.The actions taken so far reflect a fragmented and geographical approach that will likely result in a fragmented regulatory picture. Having leaders who understand risk and regulation is imperative – and this is a role for which P&C insurers are uniquely qualified.
• Insurers leverage data, but also understand the importance of imagination to navigate a world that is difficult to predict.“Insurers anticipate risks that have not yet materialized. Their forward-looking approach is crucial in the emerging AI landscape.”
• Insurers understand the power of data. Over the centuries, leading insurers have become experts in collecting, storing and exploiting data. They also understand the limits of data and have strategies to manage it when those limits are reached.
• Insurers navigate a complex web of regulatory environments. This includes all 50 US states, Washington DC and six other regulatory jurisdictions, as well as 200 countries and territories around the world. Each of them has a nuanced understanding of how different regulatory frameworks affect technological advances. This knowledge is essential to shaping effective, adaptable and enforceable AI regulations.
“Insurers are uniquely positioned to help individuals and businesses maximize the opportunities that AI offers while protecting themselves against the risks,” said Peter L. Miller, CPCU, president and CEO of the Institutes, who moderated the webinar panel. “A forward-looking approach is essential to help us navigate this changing landscape, ensuring that AI benefits society as a whole.”
Defining a framework for ethical AI
In a recent global survey of insurance executives conducted by SAS, 60% said their organizations had already started using Generative AIand 90% said they plan to invest in GenAI in the next financial year.
“Insurance plays a critical role in protecting lives, livelihoods and businesses around the world,” said Reggie Townsend, vice president of data ethics at SAS. “The global nature and influence of the industry allows insurers to lead by example with a focus on responsible innovation. That’s why trust is so critical, and deploying AI in a trusted way is essential.”
The joint Triple-I and SAS report recommends that in the short term, insurers should strive to:
• Implement an ethical framework for AI
• Cultivate AI mastery among their leaders
• Train their employees on the appropriate use of AI, including privacy and system security
• Become active in AI ethics initiatives
• Implement risk management advice to policyholders around AI risk
• Communicate their actions internally and externally
“The accelerated adoption of AI presents P&C insurers with an opportunity to re-establish leadership in a time of technological disruption,” said Michael “Fitz” Fitzgerald, Insurance Industry Advisor at SAS, speaking at the webinar. “With regulations set to evolve, insurers can leverage their unique risk insights, regulatory expertise and mastery of historical data to incentivize all industries to develop, deploy and use AI ethically, reliably and transparently.”
To download the report and access the on-demand webinar, visit iii.org/ethicalai.
With more than 50 member insurance companies, including regional, superregional, national and global companies, the Insurance Information Institute (Triple-I) is the premier online source for insurance information in the United States. The organization’s website, blog and social channels feature a wealth of data-driven research studies, white papers, videos, articles, infographics and other resources dedicated exclusively to explaining insurance and increasing knowledge.
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