A new report explores insurers’ cross-industry opportunity to influence the responsible development, use of artificial intelligence (AI) and help establish regulatory best practices.

The report, “Pioneering Ethical AI: The Crucial Role of Property and Casualty Insurers,” explores why insurers are uniquely qualified to play a lead role in the ethical development of AI.

The joint report was produced by the Insurance Information Institute (Triple-I), an affiliate of The Institutes, and data and AI firm SAS, a collaborating partner.

Regulation of AI has already begun and will only continue to develop, the report noted, indicating that actions to date “reflect a fractured, geographically based approach that will likely result in a fragmented regulatory picture.”

The need for leaders who understand risk and regulation is imperative — and it’s a role for which P/C insurers are uniquely qualified, the report added.

Insurers leverage data but also understand the importance of imagination in navigating a hard-to-predict world. Insurers anticipate risks that have yet to materialize. Their forward-looking approach is crucial in the emerging AI landscape.

In addition, insurers understand the power of data. They also understand data’s limitations, and they have strategies for when these limits are reached.

Insurers navigate a complex web of regulatory environments, including the 50 U.S. states, Washington, D.C., and six other regulatory jurisdictions, as well as 200 countries and territories globally. Each has a nuanced understanding of how different regulatory frameworks affect technological advancement. This knowledge is vital in shaping AI regulations that are effective, adaptable and implementable, the report outlined.

As a complement to the report, Triple-I and SAS will present the webinar, Pioneering Ethical AI, on Thursday, Sept. 12, 2024. It will be available later on demand. Triple-I and SAS will be joined by industry experts, including Jennifer Kyung, vice president of P/C Underwriting at USAA; Iris Devriese, underwriter and AI liability lead 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,” said McHatten. “Carriers can add valuable context that guides the regulatory conversation while emphasizing the value AI can bring to our policyholders.”

“Insurers are uniquely positioned to help people and businesses maximize the opportunities of AI while safeguarding against the risks,” said Peter L. Miller, CPCU, president and CEO of The Institutes, who will moderate the webinar panel. “A forward-looking approach is essential as we navigate this transformative landscape, ensuring that AI benefits society as a whole.”

Setting a framework for ethical AI

In a recent survey of insurance leaders by SAS, 60 percent of respondents reported that their organization had already begun using generative AI, while 90 percent indicated they plan to invest in GenAI in the next fiscal year.

“Insurance plays a crucial 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 sector positions insurers to model practices that emphasize responsible innovation. This is why trust is so essential, and the deployment of AI in a trustworthy manner is critical.”

Triple-I and SAS’ joint report recommends that, in the near term, insurers should strive to:

• Implement an ethical AI framework.
• Cultivate AI literacy in their executives.
• Educate their employees on the proper use of AI, including privacy protection and systems security.
• Become active in ethical AI initiatives.
• Implement risk management consulting with policyholders around AI risk.
• Communicate their actions both internally and externally.

“The accelerating adoption of AI presents an opportunity for P/C insurers to, once again, lead in a time of technological disruption,” said webinar panelist Michael “Fitz” Fitzgerald, insurance industry advisor at SAS. “As regulation will undoubtably evolve, insurers can leverage their unique risk insights, regulatory expertise and historical data proficiency to lead all industries to develop, deploy and use AI in ways that are ethical, trustworthy and transparent.”

To download the report and register for the webinar, visit iii.org/ethicalai.