Major Insurers Say AI Is Too Risky to Cover

Insurers on both sides of the Atlantic are warning that artificial intelligence may now be too unpredictable to insure, raising concerns about the financial fallout if widely used models fail at scale.

Anxiety

As recently reported in the Financial Times, it seems that anxiety across the insurance sector has grown sharply in recent months as companies race to deploy generative AI tools in customer service, product design, business operations, and cybersecurity. For example, several of the largest US insurers, including Great American, Chubb, and W. R. Berkley, have now reportedly asked US state regulators for permission to exclude AI-related liabilities from standard corporate insurance policies. Their requests centre on a growing fear that large language models and other generative systems pose what the sector calls “systemic risk”, where one failure triggers thousands of claims at the same time.