Experts Highlight Uninsurable Risks Associated with AI in Industries
Recent insights from the Financial Times reveal a growing concern among insurers about the potential liabilities related to artificial intelligence (AI). Major insurance providers such as AIG, Great American, and WR Berkley are currently seeking regulatory approval to omit AI-related claims from their corporate policies, citing the uncertain nature of AI model outputs, which one underwriter describes as “too much of a black box.”
The anxiety within the insurance sector is not unfounded. Incidents in recent months have underscored the risks posed by AI technology. For instance, an error in Google’s AI Overview mistakenly linked a solar company to legal issues, leading to a staggering $110 million lawsuit. Additionally, Air Canada faced complications when its chatbot erroneously generated a discount offer that they were obligated to honor. In another alarming case, a digitally fabricated impersonation of a senior executive resulted in a $25 million fraud against the London-based design engineering firm Arup during a seemingly legitimate video call.
Insurers are particularly worried not just about isolated claims, but about the potential for widespread systemic risks. As observed by an executive at Aon, while the industry can manage substantial losses from a single incident, it is ill-prepared for a scenario involving multiple simultaneous claims stemming from a widespread AI malfunction. Such a situation could overwhelm the insurance system, leading to unprecedented financial repercussions across multiple organizations.
Key Points:
– Major insurers are requesting exemptions for AI-related liabilities.
– Concerns arise from past incidents involving AI errors leading to significant financial losses.
– The insurance industry faces a unique risk from potential systemic failures of AI technology.
