Insurance companies in the UK are urged to ‘be in control’ while embracing new artificial intelligence tools and features, and to develop a specific policy for the new technology.
That is the firm message from the Association of British Insurers (ABI), the industry group that represents all large insurance firms in the UK.
In response to the rapid growth of artificial Intelligence in insurance, banking and the wider financial services space, Charlotte Clark, ABI’s director of regulation, disclosed that her organisation consulted a range of AI specialists and tech experts to produce guidelines to responsible AI innovation.
London-based Clark called the result “the first sector-specific guide of its kind” as it “sets out how those working in the insurance and long-term savings industry can put into practice AI.”
“We want to start a conversation about using and integrating AI.”
Charlotte Clark, ABI
She shared with QA Financial that, while insurers develop, produce, acquire or integrate new AI tools, features or platforms, both internally and externally, the guidelines “seek to help firms maximise the significant opportunities and benefits AI can have to insurance.”
Clark singled out improved affordability, accessibility, and availability as the most prominent wins for the insurance space.
But she also warned against the potential risks of AI, “including unfair discrimination, bias and exclusion”, explaining new technical capabilities may not recognise or identify these elements.
Key questions
Developed collaboratively by the ABI’s AI Working Group, which included experts across actuarial, data science, data protection, legal, regulation and compliance, the industry guidelines include “key questions firms should ask themselves to assist in the responsible use and implementation of AI,” Clark explained.
Moreover, while dealing and interacting with solution providers, software companies and other IT firms, the guidelines feature a set of good practice examples relating to algorithms, an outline of existing regulations that align with the UK government’s principles of AI regulation, and a set of examples of how AI is used in insurance and long-term savings.
Clark said the time has come for all British insurers to develop a responsible AI strategy, governance and proper oversight of use.
She added that any tool, platform or tech-powered platform should be inclusive in their use of AI, empowering people in all roles within the industry to ask questions and not to make assumptions.
Moreover, Clark noted that the ABI’s working group concluded that AI should only be used “in the context of relevant conduct, data, and consumer protection regulations and requirements.”
Finally, and perhaps most importantly, “be in control, so that artificial intelligence works for the business, rather than letting the technology drive you,” she said.
“Artificial intelligence presents new opportunities and risks. By setting out practical resources, questions our industry needs to consider, and regulatory requirements, we want to start a conversation about AI to get a clearer understanding of what the responsible use of AI looks like,” Clark concluded.
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