Deepfake fraud and deglobalisation among new insurance risks
Source: Middle East Insurance Review | Mar 2024
AI generated deepfake images offered as evidence in support of a fraudulent claim and deglobalisation are among the new kinds of risks that insurers will face moving ahead according to a new risks forecast study for the insurance industry.
The Global forecast 2024: Evolving insurance risks report by the global law firm Kennedys released in January 2024 draws on the insights of the firm’s lawyers around the world to analyse and explore the priority themes expected to have the biggest impact on the insurance market in the year ahead.
In addition to deepfake images and deglobalisation the report also lists biodiversity loss as issues that insurers will increasingly have to tackle.
It says ESG issues, developing technologies, geopolitics and claims inflation all remain top concerns for the sector. The risks examined in previous reports within these themes – such as supply chain disruption, climate change and cyber breaches – are all still firmly in place, but alongside these, the risks have evolved and diversified.
In broad terms, AI risks falls into three categories: Failure of the AI – both human failure and technology failure, malicious use of AI by third parties and issues with data. The report said, “A particular challenge of evolving AI capabilities is that the potential for AI harms do not neatly fit into existing insurance lines.”
The global risk environment in which the insurance sector operates has always reacted and adapted to new and emerging risks. The pace of change is, however, quickening now.
The report highlights claims arising out of the performance of AI in an unexpected manner, such as deepfake fraud, a cleaning robot causing a flood or fire, a self-driving car that kills a pedestrian because its machine learning system fails to account for jaywalking or a smart conversational bot that goes awry, damaging a business’s brand. M