Insurers can harness large-scale benefits from artificial intelligence (AI) and robotics, despite the many risks the technologies pose, Lloyd’s of London has said.
In two joint research papers with the University of Surrey, Lloyd’s said insurers are turning to AI and robotics in a bid to remain competitive, improve processes and increase efficiency.
Lloyd’s stated as AI systems become more complex and businesses look to incorporate these systems, insurers will look to respond by developing appropriate tools and products.
This technological transformation means insurers can deploy AI “in all parts of the value chain” from initial enquires to claims settlement and risk prevention.
Despite this potential, Lloyd’s warned insurers to be wary of the risks associated with AI, specifically regarding trust, ethics, security and safety.
Such risks are likely to have even greater impacts in the event of a cyber breach, while ambiguity and legal uncertainty are also leading to unanswered questions surrounding the AI phenomena.
Cobots
On the potential of robotics, Lloyd’s points to the growth of “collaborative robots”, known as cobots, as a fast-growing sector that has potential for speciality insurers.
The research said data from cobots will allow for the creation of improved risk and pricing models and thereby open up opportunities for insurers to further collaborate with clients.
Potential challenges with cobots include new risks to human co-workers, cyber-attacks and faults, which could lead to greater business interruption, property losses and possible leaks of intellectual property.
Trevor Maynard, head of innovation at Lloyd’s, said: “Insurers have an opportunity to play a role in shaping the development of the AI and robotics and will no doubt be instrumental in providing solutions to some of the most complex risks associated with these technologies.”
“Some of these risks have been well documented, however for insurers to respond appropriately, it is important that the benefits and opportunities of AI and robotics are properly understood.”