OK, so the FCA will use and regulate AI. To be expected of course.
Here are a few comments from Ross Sinclair, CEO at EIP, discussing why the plans should be a prompt for insurers to take the initiative.
Ross thinks insurers shouldn’t wait for the FCA to prescribe every step and should rather take the opportunity to demonstrate responsible innovation. This is particularly important in the claims process, as decisions need to be consistent, predictable, transparent and auditable, which makes them unsuitable for the subjective and opaque nature of probabilistic AI.
Ross Sinclair, CEO at EIP, comments:
“The FCA’s plans should be a prompt for insurers to take the initiative, meaning the industry has an opportunity to demonstrate responsible innovation, rather than wait for the regulator to prescribe every step.
“Whatever happens with further AI-specific rules, insurers should be testing new systems properly, setting clear limits on their use and making sure someone is accountable when things go wrong.
“The claims process in particular is a notoriously tricky area for AI. Claims decisions need to be consistent, predictable, transparent and auditable, which makes them unsuitable for the subjective and opaque nature of AI tools that are based on probabilities.
“Insurance-specific frameworks can make a real difference here. The industry needs to utilise deterministic decisioning systems that can be configured by insurers themselves, adherent to the specific policy requirements. This enhances the claims process by making it more efficient but keeps the necessary predictability at its core.
“Within insurance, this is where the FCA should be focusing their efforts to ensure that decision making remains fair and that customers can understand why a claim has been declined and speak to someone with the authority to review it.”
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