The Insurers Federation of Egypt (IFE) has recommended that insurance companies operating in the local market develop new insurance products specifically designed to cover AI risks. The IFE says that this represents a strategic opportunity for market growth and enhancing insurance against modern and complex risks.
Such risks relate to liability resulting from smart system decisions or damage to digital infrastructure or data, said the IFE in its weekly newsletter issued on 20 July 2025. The AI risks include losses resulting from incorrect algorithmic decisions, damages caused by uncontrolled self-learning, privacy breaches, or data loss, which are not fully covered by traditional policies.
The Federation said that it believes that dealing with the risks of AI is “no longer an option nor a theoretical product, but rather an urgent necessity” imposed by technological developments and unprecedented expansion in the use of smart systems.
The IFE emphasised the importance of collaboration between regulatory authorities, insurance companies, and AI developers to establish clear regulatory frameworks for insuring AI risks.
It added, "Insurance companies must also support public education, training and technical capacity-building efforts, in addition to collaborating with academic institutions and research centres to develop a deeper understanding of the nature of these risks and assess them scientifically, which will help in pricing them and designing appropriate coverage."