Swiss Re on the AI risks facing the health sector

Swiss Re on the AI risks facing the health sector | Insurance Business Australia

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Swiss Re on the AI risks facing the health sector

Insurance companies are starting to introduce covers for AI performance failures

Reinsurance

By
Halee Andrea Alcaraz

The health and pharmaceuticals sector will take the hardest hit from the adverse effects of artificial intelligence (AI) over the next 10 years, according to a new report from Swiss Re Institute.

The research studied the emerging risks surrounding AI in 10 industries, exploring the probability and severity of AI-related loss incidents due to cyberattacks, data bias, and algorithmic and performance-related risks, among others.

While the IT services sector will be most affected by AI risks, that is set to change as technology use becomes more widespread across all industries like mobility and health, said Christoph Nabholz, chief research and sustainability officer of Swiss Re.

“Insurance companies are therefore starting to introduce specific cover for AI performance failures – one of the biggest risks for all industries,” Nabholz noted.

The Swiss Re report explained that the risks are also rising and consequences can be serious or even fatal as the health industry continues to use AI technology to streamline patient monitoring, administration, diagnosis and drug development, among other functions.

Flawed or biased AI algorithms could result in negative effects such as misdiagnosis, leading to serious illness or even death.

The adverse effects of AI technology over the next decade will also affect other industries, such as mobility and transport, as well as energy and utilities, which rank second and third respectively.

Swiss Re said the mobility and transport sector will be highly exposed to the risks of AI largely because of the use of AI-powered connected and automated driving, posing challenges in highly diverse urban places.

Meanwhile, the energy sector will also use AI extensively because the ongoing net-zero transition requires electrification and the creation of smart grids.

Pravina Ladca, group chief digital and technology officer of Swiss Re, said that there are also risks that can lead to potential vulnerabilities despite AI’s benefits for a broad range of industries.

“Given its role as a shock absorber, the re/insurance industry has an important role to play in addressing AI-related risks and helping build the digital trust needed to harness the full potential of such emerging technologies,” Ladva noted.

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