US mortgage lenders insure against artificial intelligence screening errors

Insurers Step Up to Cover AI Mistakes

Recently, several major insurers, including Munich Re, have begun offering coverage for errors made by artificial intelligence (AI) systems. This move is aimed at addressing the challenges posed by the growing use of AI in various sectors, including finance and healthcare.

Who’s Involved?

The key players in this development are prominent insurance companies such as Munich Re, who are adapting their offerings to manage the risks associated with AI technologies. By providing this specialized coverage, insurers are acknowledging the increasing reliance on AI and the potential for costly mistakes that could arise from its use.

What’s on the Table?

The coverage aims to mitigate financial impacts that businesses may face due to AI errors. This could potentially lead to reduced capital requirements, allowing companies using AI tools to operate with greater flexibility. By having protections in place, companies might feel more confident integrating AI into their operations.

Who Might Be Affected?

This new insurance offering could affect a wide range of industries, particularly those heavily dependent on AI for decision-making processes, such as lending and underwriting in financial services. It’s a noteworthy step for businesses looking to embrace AI while managing associated risks.

A Pragmatic Approach

Overall, providing coverage for AI errors reflects a growing recognition in the insurance industry of the need to evolve alongside technological advancements. As AI continues to reshape business practices, this move by insurers may help foster innovation while also addressing the inherent uncertainties.

Original Source: https://www.ft.com/content/9317776f-c7fb-4798-86f2-8edd1fba9274