Artificial Intelligence Risks and the Insurance Sector's Approach
A new research report prepared by RAND examines how businesses and insurance companies handle artificial intelligence-related risks and litigation processes.
As businesses integrate artificial intelligence technologies into their operations, emerging risks and legal disputes are forcing the insurance industry to produce innovative solutions.
The Place of Artificial Intelligence in the Business World
Companies actively use artificial intelligence systems in many different areas such as customer service, intelligence, coding, fraud detection, and autonomous technologies.
While these integration processes offer significant opportunities for businesses, they also bring along new types of risks that have not been encountered before.
Emerging Artificial Intelligence Damages
Various harms such as misinformation, deepfakes, privacy violations, and intellectual property disputes are reported in connection with the use of artificial intelligence.
Additionally, fraud cases, product defects, and discriminatory decisions are among the primary problems generating insurance claims.
Reactions of the Insurance Market
Facing these next-generation damages that do not fully fit existing insurance lines, insurance companies are making various adjustments to policies.
The research shows that companies follow different strategies such as exclusion from coverage, additional contracts, providing direct assurance, or leaving the issue ambiguous.
Key Findings of the Research
In the report published by RAND, it is stated that misinformation events stand out and litigation processes are concentrated around intellectual property.
Additionally, the report details five different mechanisms through which artificial intelligence can create cumulative damages across multiple insurance lines.