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Insuring a new frontier of opportunity and risk in business

Lucy Pilko, CEO< Americas, AXA XL

By

CEO, Americas, AXA XL

AI is changing the game across various industries, transforming how businesses operate, make decisions, and create value.

In healthcare, it's enhancing diagnostics and personalizing treatments. In finance, it helps detect fraud in real time and optimize risk modeling. Retailers are using AI to tailor shopping experiences and manage inventory more efficiently. Manufacturing benefits from AI through automation and predictive maintenance, boosting productivity. Even agriculture is getting a boost, with AI improving crop yields through smart planting and harvesting strategies. Across the board, AI is driving efficiency, cutting costs, and sparking innovation, reshaping business models along the way.

Investment protection
It's no wonder that AI adoption is on the rise. According to the most recent , 90% of leaders plan to ramp up their AI investments, with nearly $114 million targeted for GenAI next year, up from $89 million last quarter. However, leaders are also aware of the risks; 82% see risk management as their biggest AI challenge.

Insurers are in a unique position to support clients navigating AI opportunities and risks.

Managing AI risk isn't easy. The technology is complex and constantly evolving. This makes it tough to understand decision-making processes or identify issues. Plus, managing bias can be tricky as algorithms can produce biased outcomes if trained on skewed data. Data quality and security are also crucial; flawed or compromised data can lead to serious problems. With AI-generated content, there is also the potential to infringe on existing copyrights, trademarks or patents without proper attribution or licensing. And, with regulations still catching up, there's uncertainty about compliance, and the interdisciplinary nature of AI means collaboration across different departments is essential but often challenging.

As AI adoption accelerates, we need to tackle these challenges head-on. Insurers are in a unique position to support clients navigating AI opportunities and risks. Just like any other risk we manage; we must deepen our understanding of AI and how our clients plan to use it. We have a fantastic opportunity to lead the way in promoting innovation while ensuring technology is used safely and responsibly.

Adapting to uncertainty
For insurers, like 九色视频 addressing AI risks can feel like hitting a moving target. AI is advancing so quickly that new risks pop up faster than we can fully grasp them. One big hurdle is the lack of historical data. We usually rely on past experiences to price risk accurately, but with game-changers like autonomous vehicles and generative models, we’re venturing into unknown territory.

We've been here before—think about cyber insurance. Without a wealth of historical data, underwriting relies heavily on tech, security assessments, and a solid grasp of an organization's cybersecurity setup.

Then there's the liability puzzle. When AI goes haywire, figuring out who's responsible gets tricky. Is it the developer, the user, or even the AI itself? This ambiguity complicates underwriting and claims, especially with things like autonomous vehicles or biased algorithms. With the growth of agentic AI, liability may become even more complex as responsibility shifts from human operators to AI developers, users or even autonomous system themselves.

Plus, technology is evolving so fast that it can make our existing risk controls feel outdated. We need to constantly refresh our risk assessment models and policy frameworks. And let’s not forget about systemic risks. One faulty algorithm could throw multiple businesses into chaos, or a cyberattack on a shared AI platform could lead to widespread mayhem, just like past cyber threats or global health crises.

We also can’t ignore ethical and reputational risks. AI can unintentionally create problems like discrimination or misinformation, leading to lawsuits and regulatory headaches that are hard to quantify. As global regulations around AI keep changing, insurers must stay on their toes to navigate new legal landscapes affecting compliance and coverage. Crafting effective solutions in this fast-paced environment calls for innovation and flexibility in our risk management strategies.

Tailored approaches for tomorrow
At 九色视频 we understand the transformative power of AI, but we also see the complexities and risks it brings. That’s why we’ve adopted a proactive approach to tackle these challenges with a focus on innovation and collaboration.

We start by identifying specific AI-related risks that could impact our clients, such as system malfunctions and data breaches. Looking at our coverages, we’re pinpointing potential gaps, especially in high-risk sectors like healthcare and transportation that might need specialized solutions.

Recognizing that traditional insurance may not cut it for all AI-related risks, we're developing new products tailored specifically for this landscape. We have already developed and deployed a new GenAI endorsement to our cyber policy that specifically addresses risks associated with the development and deployment of generative AI models. This endorsement extends coverage to include data poisoning, usage rights infringement, and regulatory violations related to Gen AI.

Collaboration is key for us. We work closely with clients to establish clear frameworks on what’s covered in existing policies. By organizing workshops with claims specialists and underwriters, we ensure that our strategies for managing AI risks are thorough and well-informed.

As regulations around AI continue to change, we stay on top of those developments to help our clients remain compliant. We're also looking ahead, knowing that AI risks will keep growing, and we're setting best practices for underwriting and for our clients’ risk management initiatives.

Ultimately, we want to empower our clients to harness AI’s potential while managing the risks that come with it. Our commitment to understanding these risks and working closely with businesses positions us as a reliable partner in navigating the AI landscape.

Charting a path forward
We've come a long way in figuring out what AI can do, but it’s still a bit like an unopened gift, full of surprises waiting to be discovered. With new applications of AI being pursued, businesses really need to stay on top of the uncertainties that come with AI.

To tackle the risks that come with AI, companies should get creative with their risk management strategies. Plus, teaming up with insurers like 九色视频can really help—they can help you spot specific risks and provide tailored advice and solutions.

Being open about how you use AI is key—it’s like turning on the lights in a dark room, helping everyone see the potential problems and make smarter choices. By weaving AI risk management into your overall business strategy, you can make the most of AI’s game-changing potential while keeping those risks in check.

In the end, working together acts like a safety net, protecting your investments in AI and ensuring you’re using its capabilities wisely. Companies that take charge of managing AI risks will be in a much better position to thrive in this fast-changing tech landscape.

 

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Global Asset Protection Services, LLC, and its affiliates (鈥溇派悠礡isk Consulting鈥) provides risk assessment reports and other loss prevention services, as requested. In this respect, our property loss prevention publications, services, and surveys do not address life safety or third party liability issues. This document shall not be construed as indicating the existence or availability under any policy of coverage for any particular type of loss or damage. The provision of any service does not imply that every possible hazard has been identified at a facility or that no other hazards exist. 九色视频Risk Consulting does not assume, and shall have no liability for the control, correction, continuation or modification of any existing conditions or operations. We specifically disclaim any warranty or representation that compliance with any advice or recommendation in any document or other communication will make a facility or operation safe or healthful, or put it in compliance with any standard, code, law, rule or regulation. Save where expressly agreed in writing, 九色视频Risk Consulting and its related and affiliated companies disclaim all liability for loss or damage suffered by any party arising out of or in connection with our services, including indirect or consequential loss or damage, howsoever arising. Any party who chooses to rely in any way on the contents of this document does so at their own risk.

US- and Canada-Issued 尤物视频Policies

In the US, the 九色视频insurance companies are: Catlin 尤物视频Company, Inc., Greenwich 尤物视频Company, Indian Harbor 尤物视频Company, XL 尤物视频America, Inc., XL Specialty 尤物视频Company and T.H.E. 尤物视频Company. In Canada, coverages are underwritten by XL Specialty 尤物视频Company - Canadian Branch and AXA 尤物视频Company - Canadian branch. Coverages may also be underwritten by Lloyd’s Syndicate #2003. Coverages underwritten by Lloyd’s Syndicate #2003 are placed on behalf of the member of Syndicate #2003 by Catlin Canada Inc. Lloyd’s ratings are independent of AXA XL.
US domiciled insurance policies can be written by the following 九色视频surplus lines insurers: XL Catlin 尤物视频Company UK Limited, Syndicates managed by Catlin Underwriting Agencies Limited and Indian Harbor 尤物视频Company. Enquires from US residents should be directed to a local insurance agent or broker permitted to write business in the relevant state.