In an era where artificial intelligence (AI) technologies are rapidly advancing, fewer than a third of companies are opting for tailored insurance coverage to protect against risks tied to AI and other tech-driven services. According to Beazley’s Digital Health & Wellness 2024 report, just 30% of businesses have secured AI-specific insurance, despite the growing potential for bodily injury linked to these technologies.
Beazley’s findings emphasize the importance of adequate coverage, particularly as AI tools like deep learning algorithms introduce complex risks. One of the core challenges is the “black box” nature of AI systems—where the decision-making process is opaque, making it difficult for users to fully trust AI recommendations or address inherent biases. This uncertainty heightens exposure to unforeseen liabilities.
The survey, conducted across 600 industry executives in Europe, North America, and Asia, highlighted the increasing concern over trustworthiness and bias as AI becomes more embedded in health and wellness sectors. Many executives are wary of the legal and ethical risks posed by these emerging technologies, and these concerns are contributing to a reluctance to invest in AI-specific insurance.
Supply Chain and Recruitment Struggles Compound the Problem
AI-related risks aren’t the only issue plaguing digital health companies. Supply chain disruptions and recruitment challenges are also significant barriers to growth. Beazley’s report revealed that 29% of respondents cited supply chain issues as a key obstacle, while 28% pointed to recruitment difficulties. These figures mark a sharp rise from 2022, when only 17% and 16% of companies, respectively, identified these issues as critical concerns.
This combination of risks has dampened growth expectations across the sector. Less than half (43%) of the companies surveyed anticipate business expansion in 2024, with outlooks varying by region. In Singapore, only 37% of executives expect growth, while Italy and the UK are more optimistic, with 56% and 54% respectively predicting a positive trajectory.
Cybersecurity Threats Take Center Stage
Alongside AI-specific risks, cybersecurity threats remain a primary concern for industry leaders. The number of executives worried about ransomware, phishing, and other cyberattacks has jumped to 35%—up from 27% in 2022. The surge in these threats is prompting companies to reassess their digital defenses, though many still hesitate to invest in AI-tailored insurance solutions.
Concerns over competency, particularly misrepresentation in treatment or advice, are also on the rise. Beazley’s report noted a significant increase in executives worried about competency risks, with 38% now expressing concerns—up from 24% in the previous year.
As AI continues to shape the future of digital health, companies face a growing array of challenges. From trust and bias issues to cybersecurity threats and supply chain woes, the sector’s path forward is far from straightforward. Yet, despite these hurdles, many firms remain reluctant to invest in AI-specific insurance, leaving them vulnerable in an increasingly technology-driven landscape.
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