The legal implications of AI for insurers
AI IN INSURANCE
The legal implications of AI for insurers
By Katie Simmonds , Managing Associate at Womble Bond Dickinson
“ One of the issues with using AI is that it is opaque , meaning what we can ' t do sometimes is actually explain how the AI system works . This can create several potential risks and issues . The key dangers of becoming overly reliant on technologies is that you fail to be able to understand how you are using individuals ' personal data or verify that an answer or response is ' right '. Even where the answer is ' right ', there is a risk of perpetuating historic biases and discrimination into future decisions . For example , in health insurance , an individual may be unfairly blocked from certain policies . This could have knock-on effects for that individual , who may require the health insurance for a mortgage rate , potentially removing housing opportunities .
“ For businesses , overly efficient use of location data could mean higher rates of rejection based on historical crime rates or antisocial behaviour . This postcode lottery begs the question of how anywhere that could meet these parameters could ever realistically level up , even with sensible mitigations ? Whether it ’ s a third-party application or something that is bespoke , you will need a complete view and understanding of what is going in and what process leads to what comes out .
“ Such is the nature of AI , it will be constantly learning , therefore this understanding must remain agile . It can only do exactly what you tell it to do , and poor instruction or understanding will not warrant a pass if the machine behaves in a way that is illegal . For this reason , we ’ re likely to see more appointments of a Chief AI Officer or similar role that will bridge the understanding between tech , ethics , and the legalities .”
86 May 2023