AI Insurance Is Coming, Here's Why

AI is not only a powerful tool, but it is also can be a highly risky technology if used incorrectly. No matter how much you take care of, there might be some lurking risk, which is either unknown or uncontrollable, and that means you need a different way of risk-management. If you perform a thorough pre-mortem analysis, ensure that training and testing are complete, and stress test all the systems with red teams' help, you can be almost confident about the system's performance. However, there might be some unidentified or identified risk but can't be anticipated or controlled. Such residual risk can be dealt with by way of transference. Transference of risk transfer is a risk management and control strategy that involves the contractual shifting of a pure risk from one party to another. One example is the purchase of an insurance policy, by which a policyholder passes the specified risk of loss to the insurer.