EIOPA, the European regulator of insurers, aims to promote financial stability and confidence in the insurance and pension markets. This EU agency published in June 2021 a report on the principles of ethics and governance concerning the use of artificial intelligence in the insurance sector.
The integration of AI in the insurance sector can transform generally tedious and time-consuming processes: underwriting, claims management, fraud detection, customer service…
Thus, AI allows the implementation of:
• 24/7 conversational chatbots to respond to online inquiries;
• Automated e-mail analysis and authentication systems for faster processing (preparation of response elements which will be reviewed by the customer advisor);
• Rapid automated management solutions for minimal automobile claims, with AI image processing of the damaged vehicle;
• Analysis of data from connected objects (fall detector, water leak detector, etc.) to trigger human intervention.
The benefits of AI seem obvious for insurance players but an ethical and responsible use of AI is necessary. Many French and European rules already set a framework and limits on the use of data by insurance companies (RGPD, CNIL, etc.). In April 2021, the European Commission unveiled its draft regulations on the ethical use of AI and is expected to legislate on AI liability in 2022.
The European Insurance and Occupational Pensions Authority, EIOPA, published, on June 18, 2021, a report for an ethical and trustworthy artificial intelligence in the European insurance sector.
The report of the EIOPA expert advisory group on digital ethics in insurance
EIOPA convened an expert advisory group that helped identify the opportunities and risks associated with the growing use of AI in insurance.
The experts then identified six key principles:
- Principle of proportionality :
– Insurance companies should conduct an AI use case impact assessment to determine the governance measures required for a specific AI use case.
– Governance measures must be proportionate to the potential impact
of a specific AI use case on consumers and/or insurance companies.
– Insurance companies should then assess the combination of measures put in place to ensure ethical and trustworthy use.
- Principle of equity and non-discrimination :
– Companies must respect the principles of fairness and non-discrimination when using AI. They must take financial inclusion issues into account and avoid reinforcing existing inequalities, especially for socially beneficial products.
- Principle of transparency and explainability :
– Insurance companies should strive to use explainable AI models and tailor the types of explanations to use cases and beneficiary stakeholders.
- Principle of human supervision :
– Insurance companies should clearly assign and document the role
and the responsibilities of staff involved in AI processes embedded in their governance system.
– It is also important that insurance companies assess the impact of AI on the work of employees and that employees have received adequate training.
- Record Keeping Data Governance Principle :
– Provisions included in national and European data protection laws (e.g. GDPR) should serve as a basis for implementing good governance of data used by insurance companies.
These must ensure that they are accurate, complete and appropriate whether they come from internal or external sources.
– In addition, data should be stored in a safe and secure environment and, especially for high-impact use cases, insurance companies should maintain appropriate records of data management processes and modeling methodologies to to allow their traceability and auditability.
- Principle of Robustness and Performance :
– Insurance companies should use robust AI systems, both when developed in-house or outsourced to third parties, taking into account
their intended use and the potential to cause damage.
– AI systems should be deployed in resilient and secure IT infrastructures, including against cyberattacks.- Insurers, unanimous on the need to implement reasoned AI that respects the ethical principles they share, can put these principles implemented within their companies.