European re/insurers have shown that they are supportive of artificial intelligence (AI) but have expressed views on where ethics should be followed.
AI is already being used by insurers and reinsurers to help improve customer service, increase efficiency, provide greater insight into customer’s needs and to prevent any cases of fraud.
Insurance customers are welcoming to the use of AI within the insurance sector as it tends to respond to their needs beneficially and results in more convenient interactions customers make with the insurer.
Insurance Europe says that in the future, AI is expected to help insurers to predict risk with greater accuracy and to use enhanced foresight in order to produce products which responds to emerging risks.
However, there are certain challenges which insurers will face if they are to use AI to benefit both themselves and consumers.
Firstly, when developing an AI system, there can be restricted access to data from the public sector. This makes it more difficult for developers to create an accurate form of AI, therefor consumers are less likely to favour the system. For maximum societal benefit, such datasets should be available for free and in a machine-readable format.
Which then leads on to non-personal data, which according to Insurance Europe, some AI applications are also sometimes concentrated in the hands of a few entities, resulting in restricted or expensive access to data that could improve AI systems and better serve customers.
Insurance Europe wonders whether the issue might cause some concern and raise questions over how access to this data should be controlled.
Secondly, a holistic approach to regulations is a necessity to insurers. The EU legal framework already covers areas relevant to AI such as fundamental rights, privacy and data protection, as well as product safety and liability.
The substructures for AI are also complimented by national regulations. In order to support the development and uptake of AI, and to avoid unnecessary regulatory burdens, a horizontal, proportionate and principles-based AI framework is needed to support and build upon the already existing EU and national regulatory ones, says Insurance Europe.
Lastly, Insurance Europe is concerned about whether there is a lack of collaboration between authorities with the responsibilities in the field of digitalisation. They claim this to be problematic as there is a need for all national authorities to work closely to further ensure consistency in applying the rules to further develop the digital single market.
Whether they are responsible for conduct of business, prudential regulation, competition or data protection, the contribution from all authorities is essential to provide safe and ethical AI.
When it comes to financial services legislation, focusing on insurance in particular, principles such as transparency, fairness accountability and ethics are already undertaken by rules on conduct of business and disclosure. Meanwhile, rules on advice apply when the recommendation is provided by a human or by AI.
