Acknowledging the rapid development and disruptive potential of artificial intelligence (AI), MAPFRE chairman and CEO Antonio Huertas (pictured) has called for widespread legislation over the ethical risk posed by the technology.
“AI has the potential to become one of the most disruptive technologies humanity will ever develop,” said Huertas in his keynote speech opening the Geneva Association Summit 50. The two-day summit, which marks 50 years since the organisation’s founding, kicked off on Tuesday in Zurich, Switzerland.
“I believe that if we do that right, we can turn these technologies into powerful tools at the service of workers, improving their skills and experience while boosting the economy,” Huertas said.
“But clearly, it's necessary to establish a management framework for operational regulatory risks, and we must legislate on ethical risk. We must move forward in an ethical and responsible development of artificial intelligence.”
The Geneva Association is a non-profit think tank that includes the world’s largest insurers. Its 80 members protect around 2.6 billion people worldwide and have a combined US$21 trillion in assets under management.
Huertas told insurance leaders that while it’s still early to predict how AI will develop, the technology’s impact will be far-reaching. He also warned that organisations that aren’t incorporating AI into their business risk being left out of the game.
“It's not a passing fad. It is a tool that will most likely mean an absolute transformation of many aspects of our lives, not only on an economic level,” he said.
AI has already transformed different segments of the insurance value chain, notably underwriting, claims, and fraud detection. However, the rapid rise of ChatGPT this year has brought the ethical risks of AI to the fore.
While generative AI has the potential to automate repetitive tasks, improve the accuracy and speed of underwriting decisions, and enhance customer service and experience, observers are increasingly concerned over the risk of increased bias and data privacy breaches.
While Huertas is optimistic about the impact of tools like ChatGPT on productivity and workers’ jobs, he also stressed the need for a robust regulatory framework to guide AI development.
“In a global market, Europe must find the balance between regulation, which is undoubtedly necessary, and the development framework for these technologies,” the MAPFRE leader said.
His comments come as Europe is in the final stages of talks to finalise the world’s first comprehensive AI regulation. First proposed in 2021, the AI Act is a far-reaching legislation that will have significant implications for the development and use of AI systems in the European Union and beyond.
Stringent regulations in the proposed act have been met with push-back from big tech companies. The EU aims to finalise the legislation before February 2024; otherwise, the 2024 European Parliament elections might delay its passage until early 2025.
“It is necessary to experiment with [AI] precisely to know its limits and verify the calibration [that is] free of bias towards people and circumstances,” Huertas said.
At the same time, Huertas cautioned against overregulation, noting that insurers are juggling more regulatory oversight than ever before.
“In 2007, European insurers only needed to comply with around 12 directives to operate,” he noted. “Fifteen years, these 12 have turned more than 30. If we have a look at what is coming in the immediate near future, we will be talking about more than 60 directives for operating just in the EU.
“Consequently, policymakers should be careful and cautious when promoting regulation that will affect the insurance industry's role. In this context, organisations, forums, and think tanks such as the GA (Geneva Association) are more important than ever since they allow insurance voices to be present in the debate addressing important issues like protection gaps, resilience, or social and financial inclusion.”
Aside from AI, Huertas also addressed the enormous challenges the global insurance industry faces in the future. Risks like cyber, climate change, geopolitical conflicts, and inflation make insurance more complex but relevant.
“In recent years, we have witnessed an undeniable shift in the global landscape, a landscape characterised by new political turmoil like the war in Ukraine or the Middle East, the energy crisis, rapid technological change, inflation, and macroeconomic volatility, all having a major impact on our business,” he said.
“Despite these turbulent times, the insurance industry has been steadfast in supporting economic resilience through prudent investment and sound expertise in risk management. The world is changing, regulation is evolving, and insurance business is getting more complex.”
Among these threats, the looming climate disruption is a “colossal challenge that demands our immediate attention.” Huertas called on fellow insurance leaders to support the energy transition and “walk the path of sustainability.”
“In this global crisis, insurers have a pivotal role to play not only as a financial protector but as catalysts for meaningful change,” he said.
“Let us seize the moment to reimagine our industry, to redefine our purpose, and to leave a lasting legacy of policies of positive change together.
“The challenges we face are great, but so too is our potential.”
Do you agree with MAPRE chairman and CEO Antonio Huertas’ call for AI regulation? Share your thoughts on this story in the comments.