Chatbots, autonomous vehicles, and connected machines in digital factories indicate a with a widespread implementation of Artificial Intelligence (AI). AI can benefit businesses, increasing their efficiencies, and reducing repetitive tasks.
Allianz Global Corporate & Specialty (AGCS) published a new report called “The Rise of Artificial Intelligence: Future Outlook and Emerging Risks”, identifying benefits and risk concerns about AI implementation in society and industry
Today, AI performs simple tasks, but future AI generations will be able of solving difficult problems and execute complex transactions. The technology is used by the transport sector, it can predict the weather, process financial transfers or operate industrial machines. Namely, according to Accenture, AI could double the annual economic growth rate in 12 developed economies by 2035 .
But with these benefits also have risks. AI software could help reduce cyber risk for companies by better detecting attacks, but could also increase it if hackers take control of systems. It is already estimated that a major global cyber-attack has the potential to trigger losses over $50 billion but even a half-day outage at a cloud service provider can generate losses around $850 million.
According to AGCS, there are five areas of concerns:
- Software accessibility;
In terms of safety, AI can lead to insufficient validation activities, which are necessary to guarantee cyber-secure AI agents. This, however, can cause an increase in defective products and recalls.
AI raises questions about insurance as well. Namely, AI agents cannot legally be held liable. The manufacturer or software programmer of AI agents is liable for defects that cause damages. However, AI decisions are not directly related to design or manufacturing, but are taken by AI’s interpretation of reality, would have no explicit liable party.
Traditional coverages will have to adapt to protect consumers and businesses alike. Insurance will also need to address better issues like cyber-attacks, business interruption, product recall and reputational damage.
For more information, see the PDF herebelow