Is AI washing the next big risk management arena?

To many, the promise of AI is endless, with reduced costs, more operational efficiencies, and smart ways of finding good investment returns. Investment teams at insurers are hoping the technology allows them to scale, boost productivity, and cut overall costs.

Some are already utilising the technology for these purposes.

Others, however, are cashing in on this promise of AI to push up their share price or valuations, when their own capabilities aren’t sufficiently advanced. This misrepresentation of a company’s use of AI is called AI washing and could be a serious issue for investments going forward if investment teams are caught overselling their use of it, and if the places they invest in are doing the same.

So, what are the specific risks, and how should insurers avoid them?

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