Artificial intelligence can do a lot to improve business practices, but AI algorithms can also introduce new avenues of risk. For example, consider Zillow's recent shutdown of Offers, the branch of the company dedicated to buying fixer uppers, after its prediction models significantly overshot house values. When housing price data changed unpredictably, the group's machine-learning models didn't adapt quickly enough to account for the volatility, resulting in significant losses. This type of data mismatch or "concept drift" happens if you don't give proper care and respect to data audits. Zillow's failure to properly audit its data didn't just hurt the company; it could have caused wider damage by scaring other businesses away from AI. Negative perceptions of a technology can halt its progress in the commercial world, especially for a category like AI that already went through several winters.

Artificial intelligence can do a lot to improve business practices, … the group's machine-learning models didn't adapt quickly enough to account …

Artificial intelligence can do a lot to improve business practices, … Machine-learning pioneers like Andrew Ng recognize what hangs in the …

We are excited to bring Transform 2022 back in-person July 19 and virtually July 20 - August 3. Join AI and data leaders for insightful talks and exciting networking opportunities. Artificial intelligence can do a lot to improve business practices, but AI algorithms can also introduce new avenues of risk. For example, consider Zillow's recent shutdown of Offers, the branch of the company dedicated to buying fixer uppers, after its prediction models significantly overshot house values. When housing price data changed unpredictably, the group's machine-learning models didn't adapt quickly enough to account for the volatility, resulting in significant losses. This type of data mismatch or "concept drift" happens if you don't give proper care and respect to data audits.

Like other insurance organizations over the past year or so, Gore Mutual Insurance Company (Cambridge, Ontario), Canada's oldest property/casualty insurer, understood that it needed to harness the competitive power of artificial intelligence. Seeing the technology's potential, in 2018 the insurer began an initiative to study AI and build an internal capacity for applying it to its business processes. The insurer concluded that an external partner could be a powerful accelerator for its adoption of AI. As a result of that insight, the carrier is currently working with Element AI (Montreal) on an initial project to integrate the vendor's software into its underwriting practice. "We had been dabbling with AI in some business units, and we have a team with actuaries and data scientists, but we were not yet doing anything formal," recalls Sean Christie, VP and CIO, Gore Mutual.