Automobiles and Artificial Intelligence
Insurance and the Ethos of "Move Fast and Break Things"
Insurance is the unappreciated hero of innovation. Innovation is critical, but messy. Insurance protects individuals, families, communities, and businesses from the injury and damage that may result from the tech innovator’s philosophy of “move fast and break things.” Safety, security, and cost tradeoffs are the hallmark of “just good enough” products. Liability insurance often bridges the gap between “just good enough” products and the consumer.
Peter Hearn, Vice Chairman of Marsh McLennan, explores the insurance industry’s 20th-century experience with the automotive industry and how “just good enough” products hold lessons for the underwriting of artificial intelligence (AI), in his article Public Risks: Insurance and the Ethos of “Move Fast and Break Things” – Automobiles and Artificial Intelligence.
AI advances science, has numerous military applications, makes investments, and controls both transportation and power infrastructures. AI has countless consumer applications. With the exponential growth of the Internet of Things and networked platforms, AI ecosystems will carry significant aggregate exposures that will likely prove difficult to understand and underwrite. The characteristics inherent in AI, especially continuously learning algorithms, present insurers with interconnected management, regulatory, corporate governance, risk management and underwriting challenges.
Because insurers appreciate that AI is changing the world, they are also looking to transform their operations. They are contemplating or experimenting with use of AI for strategic planning, marketing, distribution, agent support, customer service, 30-second quoting, automated underwriting, knowledge management, policy issuance, real time claim adjustment and litigation management.
Guy Carpenter works with insurers to help people, families, communities, and businesses enjoy the benefits of emerging technologies, such as the automobile and AI while also managing the growing pains associated with these technologies.
