Technology disruptions emerge as the primary challenge facing the insurance sector in 2024. These disruptions, driven by advancements in artificial intelligence (AI), blockchain, and big data analytics, pose significant hurdles for the industry, particularly in adapting to these innovations while safeguarding data security and privacy.
While acknowledging its last knowledge update on the topic was two years ago, ChatGPT’s assessment resonates with industry experts like Alex Haslam, a principal at Gilchrist Connell, a Sydney-based national law firm specializing in insurance, construction, and commercial litigation. Haslam notes that while AI and chatbots offer speed and efficiency benefits in tasks such as legal research and document comparison, concerns persist regarding data privacy, security, and the accuracy of AI-generated content.
Haslam emphasizes the importance of experienced supervision to mitigate these risks and underscores the potential long-term disadvantages of over-reliance on AI without adequate controls. He highlights ongoing government discussions around AI regulations, including the need for appropriate safeguards to ensure the responsible use of AI technologies.
The Australian government’s Safe and Responsible AI discussion paper aims to address regulatory gaps and strengthen the framework around AI technologies. Haslam anticipates valuable insights from this consultation process, which could inform future regulations to mitigate AI-related risks.
In the insurance realm, Haslam warns of potential gaps in professional indemnity insurance coverage related to AI use. He advises clients to engage in open discussions with brokers and insurers regarding AI usage and prioritize education on data protection legislation and corporate policies around AI use.
Furthermore, Haslam suggests insurers focus on protective measures implemented by insured parties rather than solely on AI usage when assessing coverage. He notes the availability of insurance products tailored to cover claims or losses arising from AI use and errors, highlighting the importance of proactive risk management in navigating the evolving landscape of AI in insurance.
