Instructor: David Schuff, Section 003

Advances in AI Causing Big Decisions for Insurance Companies

As artificial intelligence continues to grow more advanced, many questions now need to be considered regarding risk management and insurance. One huge question is who is at fault when an AI powered technology that makes its own decisions does something that harms others? The very straight forward example provided by Business Insurance was what happens when an AI powered car hits someone? But the question even stretches further than that because “AI will have an impact on such diverse areas such as the economy, the environment, politics and the legal system”. Obviously there are many ethical questions that come into play here too but it will be very interesting to see how these innovations are handled from an insurance perspective.


Who do you think should be held responsible for the decisions made by AI?



5 Responses to Advances in AI Causing Big Decisions for Insurance Companies

  • This article really appeals to me because of my dual RMI/MIS major. I know when this subject is brought up in insurance cycles, AI is seen as a true disruptor for the auto insurance space because it is likely to reduce accidents to the point that auto liability policies are no longer a tenable source of business. I also feel that it is unlikely that a fully AI vehicle with no human interaction would impose personal liability on the driver. It also likely would not affect their rates as I find it doubtful regulators would let those sorts of penalties stand up when the driver had truly no impact. I look forward to seeing how this issue plays out!

  • Over the summer I interned at Liberty Mutual Insurance. A big trend in the insurance industry is that technology has been advancing too much and it is almost too useful that insurance companies are losing money because some lines of business are becoming obsolete. You bring up some interesting points, especially involving how to insure self-driving cars. The debate is between auto insurance or global specialty which covers anything from concerts to cruise ships. Additionally, machine learning can aid in the insurance industry by such factors as policy pricing and customer experience (chatbots). Although customers generally prefer the “human experience”, it might cut down on costs in an industry that cannot afford any more huge losses.

  • I think the ethical dilemmas concerning AI, especially driver-less vehicles, are something that absolutely needs to be discussed. I agree with Alan that AI will likely reduce the rates of accidents. However, a driver-less car hitting a pedestrian is only a simple example of ethics and AI. A more complex example about the decision making involve with AI is how AI would make a decision if there was a risk to both the people inside the car and outside the car. Would the AI decide to protect the passengers inside the vehicle? Or would it make the decision to cause the least amount of damage to humans? The ethics behind driver-less cars are certainly very complex.

  • Hi Christian! I think the ultimate solution that the article ends with, the idea that all parties would be pulled into litigation as a sort of shared responsibility, is the best we can come up with right now. We are only at the beginning of a trend where AI is widely used beyond the typical chat bot. Other posts on this community site have talked about AI performing tasks a cardiologist would typically do or AI providing nutritional information. These uses of AI will have more far-reaching impacts than what we are familiar with. There is no precedent set and, as the article you present shows, we have only just begun to build the foundation of rules and regulations that will strive to somehow monitor and control the application of AI.

  • Hi Christian. This topic has always been something that interests me as AI powered cars move forward. The ethical issue of what the car should do is one thing, but the question of who is at fault when it comes to insurance is something I hadn’t thought about. After thinking it over I do not think it would differ much from how it works today. Whatever event causes the AI to react is to be blamed. In the event that a car malfunctions and cause harm I believe the insurance of the car owner should cover it, but it is up to them if they wish to offer that coverage. Considering people driving AI powered cars will likely bring the risk pool down a lot I think it makes sense for insurance companies to reward them from purchasing AI cars by covering this instance.

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