GFIA Global Federation of Insurance Associations

Artificial intelligence (AI) is transforming many industries, including the insurance sector. The Global Federation of Insurance Associations’ (GFIA) paper on AI and the insurance industry published today, highlights:

• examples of how and why insurers make use of AI;
• the safeguards insurers have put in place to prevent potential unintended outcomes of the use of AI; and
• the current supervisory and regulatory response to the use of AI in the insurance industry and some principles for possible future actions

How insurers use AI

The paper notes that the insurance industry around the globe is embracing the opportunities offered by AI and adopting it into their businesses. The areas where the industry is using AI includes:

• Customer service
• Risk modelling and natural catastrophes
• Claims management
• Model risk management

Responsible Use of AI

The paper stresses that as the industry has a ‘long tradition of the use of data and technology as an integral part of the insurance business model’, it is aware of the risks, and has put in place processes with regard to:

• Model risk management
• Transparency and explainability
• Combatting illegal discrimination

Regulatory and Supervisory Response

To date, GFIA remarks that ‘AI in the financial sector in their jurisdiction is often divided between multiple supervisors’ which causes complexity. GFIA calls for:

• all involved supervisors to closely coordinate to avoid conflicting views or overlapping requests.
• encourage global supervisors and policymakers to seek to align their approaches with global principles and standards
• risk- and principles-based approach to AI regulation and supervision works well