Artificial intelligence and risk management

Artificial intelligence (AI) has wide implications for risk management

FERMA has welcomed draft European guidelines on AI ethics, the first in the world, that have been prepared by a High-Level Group from the European Commission. FERMA President Jo Willaert explains why this is an important issue for risk managers: “There needs to be public trust in AI. Otherwise, it will cancel out advantages that AI can give organisations. The professional risk manager can, therefore, play a fundamental role in the implementation of AI through a diligent assessment of the risks, including the ethical dimensions.”

FERMA sees wide implications for risk management from AI, including: 

  • The ethics of using AI in commercial and industrial operations.

  • The management of the associated risks.

  • The application of AI in the management of risks, especially thanks to greater availability of data.

The 2018 FERMA Risk Manager Survey revealed that more than one-third of risk managers are already involved in identifying and assessing risks involved with new technologies for their organisations, and FERMA expects this number to grow. The survey also found that some risk managers have begun using technology such as AI and blockchain as part of their work.

FERMA has also drawn the attention of the Commission to implications of AI for the insurance underwriting process, and the opportunities and threats of AI technologies for the insurability of organisations. In particular, FERMA expresses concern that if AI is deployed in underwriting, insurers will know considerably more than the insurance buyer about how AI has been integrated into the underwriting process. It fears this asymmetry of information be a disadvantage for the insurance buyer.

With this in mind, FERMA has planned a high-level panel discussion on AI at the 2019 FERMA Forum which will take place on 17-20 November in Berlin.