Ensure AI ethics in Insurtech – best practices to follow.

May 6, 2024
1 min read

TLDR:

  • AI technology is becoming more prominent in the insurance industry, including generative AI.
  • Insurance providers must navigate regulatory environments and ethical considerations when using AI.

The article discusses the rise of AI technology in insurance, particularly generative AI, which can automate claims processing, detect fraudulent claims, and assist with risk assessments. However, insurance providers must be mindful of regulatory environments and compliance requirements when using AI.

In the highly regulated insurance industry, each state has its own set of regulations and compliance requirements that insurance carriers must adhere to. This can make it challenging for insurers to determine how they can use AI technology while staying compliant with state laws. The National Association of Insurance Commissioners (NAIC) provides guidelines and recommendations for regulators, but most states have not outlined specific requirements for using AI in insurance.

To ensure compliance and ethical use of AI, insurance carriers are advised to take a conservative approach, building ethical, responsible data governance models that align with the regulations of the most conservative states in which they operate. Ethical AI should be trained on accurate, unbiased data, with transparency around data usage and oversight by humans to ensure fair and objective decision-making.

Working with technology partners that prioritize responsible AI and have strict data governance models can also help insurance carriers navigate the complex regulatory landscape. While there are no universal laws regulating AI in the property insurance industry, maintaining ethical practices and working with trusted partners can help insurers use AI technology effectively and responsibly.

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