From: Captive Review
Heather McClure, of Helio Risk, examines the risks and benefits of AI in three key industries and suggests ways captives can support mitigation strategies
To maximise leverage for captive coverage and give parent companies a strategic advantage, leaders must consider the risks and opportunities associated with emerging technologies. Here we examine the benefits of AI in three industries – insurance, healthcare, and construction, consider its risks and suggests ways organisations, supported by their captives, can undertake mitigation strategies.
Insurance industry benefits and risks
Insurance companies already use artificial intelligence (AI) in various insurance operations:
- Underwriting: Underwriters use AI to increase accuracy of risk assessment by analysing historical data to identify patterns and predict risk ahead.
- Claims: Insurance companies can handle large volumes of claims by scaling operations related to intake and adjusting.
- Customer Service: Most people have experienced customer service chatbots trained to respond to frequently asked questions and offer solutions to common situations.
- Fraud Detection: AI can flag specific data in applications or claims often signaling possible fraud.
Insurance companies risk data inaccuracy when any flaw in a complicated algorithm is used. Poor data quality can lead to improper claims or underwriting decisions. AI can incorporate bias influenced by factors such as credit score, education level, income, occupation and homeowner status, penalising low-income buyers. This could fall foul of unfair trade practice laws and other legal standards, especially when data is not used in accordance with industry regulations.
