Artificial intelligence promises to make sweeping changes across society, but a report released Thursday by Allianz Global Corporate & Specialty S.E. The report, The Rise of Artificial Intelligence: Future Outlook and Emerging Risks, says AI comes with both potential and risks in such diverse areas as economic, political, mobility, health care, defense and environmental. AI, the report said, "spans applications in almost every industry and has been predicted to increase corporate profitability in 16 industries across 12 economies by an average of 38% by 2035." The Allianz Risk Barometer 2018 rated the impact of AI and other forms of new technology as the seventh top business risk, ahead of political risk and climate change. Companies face new liability scenarios and challenges as responsibility shifts from human to machine, Allianz Global Corporate & Specialty said in the report.

Emerging tools such as artificial intelligence and natural language processing are being used in the insurance sector, but costs remain high and there are questions about bias being introduced into machine learning, according to a speaker at the Public Risk Management Association's annual meeting Monday. "Everything is smart these days," said Brian Billings, vice president of predictive analytics in Ballwin, Missouri, for Midwest Employers Casualty Co., part of W.R Berkeley Corp., and such devices as cell phones and televisions now collect data from their users. "All of that technology is being driven by the use of data." Machine learning, including artificial intelligence and natural language processing, takes the data being collected and tries to predict some kind of outcome, Mr. Billings said, such as a numerical value or, in the case of the insurance sector, a claims scenario. With natural language processing, a model is trained to read text, Mr. Billings said.

Origami Risk LLC and Gradient A.I. Corp. have formed a partnership allowing Gradient's claims and policy modeling capabilities and predictive analytics resources to be used on Origami's digital platform, the companies said in a joint release Tuesday. Insurers, third-party administrators, risk pools, and self-insured organizations will be able to access Gradient's proprietary data sets of millions of claims and policies, which are integrated with the Origami platform's workflow, reporting and digital engagement tools, the statement said. The Gradient tools can be applied to policy underwriting and claims adjusting processes, such as enabling claim teams to focus greater attention on claims with a high probability of becoming significant cost-drivers, the statement said. "Our collaboration with Gradient AI offers insurers, risk pools and large self-administered plans using our platform ready access to" Gradient's tools, Robert Petrie, CEO of Origami Risk, said in the statement.

Just-released proposals out of Europe that call for new rules to regulate high-risk artificial intelligence systems provide another marker for U.S. insurers and regulators as they consider the opportunities and risks of this evolving technology, industry experts say. The proposals and accompanying data strategy unveiled Feb. 19 are part of the EU's broader digital strategy aimed at setting global standards on technological development that put people first. In its report, the European Commission says that while artificial intelligence can bring advances by tackling climate change and making production more efficient, it also "entails a number of risks, such as opaque decision-making, gender-based or other kinds of discrimination, intrusion in our private lives, or being used for criminal purposes." Jon Godfread, insurance commissioner for North Dakota, said the policy document is "another fencepost and guideline that we can all take a look at" as international discussions on how to regulate artificial intelligence continue to develop. The EU's risk-based regulatory approach outlined in the report says clear rules are needed for high-risk artificial intelligence systems in recruitment, health care, transport, energy and law enforcement so that they are "transparent, traceable and guarantee human oversight."

As we wait for artificial intelligence to become developed to the point that it's ready to be deployed in its fullest capacity, we can't help but wonder how it's going to affect us all. That same sentiment is shared by us, the people in the business insurance sector. So, what exactly can we expect from the advent of artificial intelligence in relation to our industry?

Artificial intelligence will create new liabilities for organizations, but it can also be harnessed as a risk management tool, a panel of experts said. By processing high volumes of data, risk managers can get a better grasp of the risks they face, spend less time on repetitive tasks and use connected devices to enhance their risk management processes, they said. Companies are already implementing AI, and risk managers should ensure they are aware of the risks and liabilities that the technology creates, said Philippe Cotelle, head of insurance and risk management at Airbus Defence & Space, a division of Airbus SE in Toulouse, France. He was speaking during a session of the Federation of European Risk Management Associations' biennial forum in Berlin on Monday. Risk managers should make sure they are "going to capture what is within AI both in terms of risks and in terms of opportunity, and it becomes a tool for the risk manager," Mr. Cotelle said.

Travelers Cos. Inc. on Wednesday said it is partnering with Groundspeed Analytics Inc. on the use of artificial intelligence to streamline processes for new business and policy renewal. Travelers will be using Groundspeed's technology for commercial insurance policies, with a focus on complex submissions for the middle market, a spokeswoman for the insurer said in an email. The collaboration will apply to property/casualty lines, she said. The companies also will collaborate on the design of additional artificial intelligence capabilities, Travelers said in a statement. Their use of AI aims to help with risk selection and to allow agents and brokers to write business more quickly, the statement said.

Travelers Cos. Inc. on Wednesday said it is partnering with Groundspeed Analytics Inc. on the use of artificial intelligence to streamline processes for new business and policy renewal. Travelers will be using Groundspeed's technology for commercial insurance policies, with a focus on complex submissions for the middle market, a spokeswoman for the insurer said in an email. The collaboration will apply to property/casualty lines, she said. The companies also will collaborate on the design of additional artificial intelligence capabilities, Travelers said in a statement. Their use of AI aims to help with risk selection and to allow agents and brokers to write business more quickly, the statement said.

Artificial intelligence and other technologies hold great promise for the insurance industry but are not without issues, such as adoption and security, according to a panel of insurance and technology industry executives speaking at the Insurance Information Institute's Joint Industry Forum in New York on Thursday. Andrew Robinson, co-CEO for Groundspeed Analytics Inc. in Atlanta, left his life in the insurance industry "to join an early-stage insurtech company because I saw the great potential technology offered. I'm a full believer in the enablement of our industry and the role that technology is now playing, particularly AI and big data." Technology by itself, however, is not an answer to all challenges faced by the insurance industry, according to Sean Ringsted, executive vice president, chief digital officer and chief risk officer for Chubb Ltd. "For me and Chubb, we couldn't be more excited about the possibility of AI and big data and how it can be a force for good," with a couple of caveats, he said. "It's not going to do everything by itself; you've got to bring other technologies and capabilities to bear on that," Mr. Ringsted said, adding "there's always going to be a place for a human touch."

Collaboration will enable the way forward as the insurance sector adopts and deploys new technologies, according to two company CEOs who stressed partnerships Wednesday at the InsureTech Connect Conference in Las Vegas. "Regardless of the challenge, I believe there's a better way," said Tony Kuczinski, president and CEO of Munich Reinsurance America Inc. in Princeton, New Jersey. "I believe that by joining forces, we have a better chance a leveraging new ways of thinking, new technology and data, and other areas." "We have more partnerships now than at any time in our history," said Dan Glaser, president CEO of Marsh & McLennan Cos. Inc. Munich Re's own effort to accelerate the claims process in the wake of a catastrophe event involved pulling in expertise from within and outside the company, and even included a seasoned claims adjuster using his field experience to help inform an artificial intelligence system, according to Mr. Kuczinski. Mr. Glaser also said progress was a matter of priorities and focus.