What is ‘explainable AI,’ and why must insurers address it now?

Understanding ‘Explainable AI’ for Insurers

American insurers are being encouraged to prioritize the development of “explainable AI” as a fundamental part of their operations. This is particularly important as the industry faces increasing scrutiny from regulators and consumers alike.

The Importance of Explainability

Explainable AI refers to systems where the reasoning behind their decisions is transparent and understandable to users. As artificial intelligence becomes more integrated into underwriting and claims processes, it’s critical for insurers to be able to articulate how these technologies make their decisions.

Who’s Leading the Charge?

Industry analysts and regulatory bodies emphasize the need for clarity in AI applications. They are pushing insurers to adopt practices that enhance transparency. This sentiment indicates a growing recognition of how vital it is for companies to maintain trust with their clients and adhere to compliance standards.

Potential Impact on Insurers

Many insurers might find themselves at a crossroads. Balancing the innovative uses of AI with the demand for accountability could determine their future success. Failing to adopt explainable practices could lead to regulatory challenges and diminished consumer confidence.

What’s Next?

Insurers are encouraged to start taking proactive steps toward implementing explainable AI by reviewing their current systems and exploring technologies that offer better transparency. Being ahead of the curve may prove advantageous, as regulations evolve and consumers increasingly prioritize clarity in the products they choose.

In conclusion, as explainable AI becomes a focal point in the insurance landscape, companies need to adapt to ensure they meet stakeholder expectations while leveraging AI effectively.

Original Source: https://insurancenewsnet.com/innarticle/what-is-explainable-ai-and-why-must-insurers-address-it-now