As big data and AI (also called machine learning) are increasing being employed in the insurance sector, the great benefits that are expected also come with risks. The granularity of data has the potential to give insights into a variety of predictable behaviours and incidents. Given that insurance is based on predicting how risk is realised, having access to big data has the potential to transform the entire insurance production process.
This report examines both the benefits and risks big data and AI can bring to the insurance industry. In particular, this report discusses how the OECD Recommendation on Artificial Intelligence and the European Commission’s Independent High-Level Expert Group on Artificial Intelligence’s (HLAG AI) Ethics Guidelines for Trustworthy AI should be considered in the context of the insurance sector. The report concludes with policy areas in which policy makers may consider action in the insurance sector in relation to big data and AI going forward.