December 15, 2022
What: With the skyrocketing popularity of AI tools, there’s a growing risk of costly AI-generated errors and resulting lawsuits. Munich Re is leading the charge with a unique insurance policy that covers performance guarantees of AI providers.
Why it matters: While many AI applications are in their infancy, there are a growing number of AI applications designed for consumer use. Being able to quickly launch a product for this emerging industry says a lot about Munich Re. As we discussed last week, being flexible and fast are some of the keys to success in an uncertain market.
What: With over a million people signed up in just 5 days, chatGPT has taken the AI world by storm. Built on GPT-3.5, ChatGPT answers questions and generates text in a simple chat interface. You can check out others’ experiences by clicking the twitter hashtag #ChatGPT.
Why it matters: This tool is incredible, and will have wide-ranging implications across multiple business sectors. It’s worth taking a look, if you haven’t already. Check out this example:
Research Team: What are some things I should be looking out for when underwriting a general liability policy for a small furniture manufacturer?
ChatGPT: Here are some key points to consider when underwriting a general liability policy for a small furniture manufacturer:
- Risks associated with the manufacturing process, including materials, safety measures, and hazards
- Type of furniture produced and potential for damage or injury to customers
- Past claims history and financial stability of the company
- Location and potential for natural disasters or other events that could impact the business
- Potential for product recalls, liability for faulty or defective products, and legal action
- Potential for damage or loss to company property, such as machinery or raw materials
- Risk of workplace accidents or illnesses to employees
- Impact of emerging technologies, changing regulations, and other external factors on the business.
What: The increasing number of denials in cyber coverage claims is a leading indicator of trouble for cyber coverage. There’s a widening understanding gap between insurers and policyholders who may not fully understand the nuances of this relatively new and rapidly evolving product. In a landscape with a growing quantity of attacks, this understanding gap represents a significant risk for both insurers and policyholders.
Why it matters: One of the major challenges with cyber coverage is understanding the specifics of a company and fitting coverage to that company. As it stands now, most cyber coverages are somewhat of a catch coverage, with the included exclusions resulting in likely unexpected exposures for some policyholders.
Read: Broken Promises? Policyholders React to Cyber Insurer Exclusions, Claim Denials
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