Major insurers are facing a dilemma as they grapple with the implications of insuring AI technologies. According to a report by the Financial Times, insurers such as AIG, Great American, and WR Berkley are seeking approval from U.S. regulators to exclude AI-related liabilities from corporate policies. This move comes in response to concerns raised by industry experts about the unpredictable nature of AI models.
The decision to exclude AI-related risks stems from incidents that have highlighted the challenges associated with insuring AI. For instance, Google’s AI Overview erroneously implicated a solar company in legal issues, leading to a $110 million lawsuit earlier this year. Similarly, Air Canada found itself honoring discounts generated by its chatbot, while fraudsters utilized a digitally cloned executive to siphon $25 million from a UK-based firm.
Insurers are not just worried about individual catastrophic losses but also the potential for widespread systemic risks. The fear lies in the possibility of numerous simultaneous claims resulting from failures in widely adopted AI models. As explained by an Aon executive, while insurers can manage substantial losses to a single entity, they are ill-equipped to handle the fallout from an AI malfunction that triggers a multitude of losses concurrently.
Source: TechCrunch