Chartered Insurance Institute seeks public’s view on ethical issues in data gathering

The Chartered Insurance Institute (CII) has welcomed a report saying that consultation with the public is essential in reaching a consensus on what constitutes responsible use of artificial intelligence (AI) and data.

The Centre for Data Ethics and Innovation (CDEI), a government body, produced the paper, titled AI and Personal Insurance. It looks at the potential use of AI across the insurance profession, how AI is used today and explores the arguments for and against such applications.

Keith Richards, Managing Director at the CII, described the report as a step in the right direction and said it “rightly identifies common ground on what constitutes an ethical use of AI is required.”

Richards told Intelligent Insurer that the industry could undertake opinion surveys, set up citizen juries,or make use of consumer consulting groups.to find out more about the public’s attitude to AI and ethics.

The CDEI report said that the insurance industry is still in the nascent stages of AI adoption.” Incumbents have found it challenging to marry this technology with their legacy infrastructure, as well as to find the talent required to take forward innovation programmes,” said the report.

Richards said: “A significant challenge can be found in the fact that AI can only work by processing huge numbers, but that legacy systems are rarely designed to produce data in a way that can be used by AI. AI is still an emerging technology and is currently evolving faster than the profession is able to adapt. The biggest challenge really comes in making the case for a revolution in technology to better prepare the profession to be ahead of the curve.”

Insurers also need to be aware of the importance of granularity of data. Richards said: “Algorithms are very useful for finding correlations, but not so good at identifying causation. “For example, it may be identified that there is a correlation between insurance fraud and lower income residential areas, but it would be simplistic to conclude that insurers should therefore charge higher premiums for all people on modest incomes.”

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Among the other issues the CDEI report identified was deciding whether it is acceptable to process data from social media platforms.

However, many commentators are keen to stress the upside of AI for customers. Richards told II: “In the future, AI may be able to quantify more accurately the probability of different factors such as family history and lifestyle factors in being a cause of illnesses. This development may mean that insurers are able to offer lower rates for people who have healthy lifestyles, instead of a blanket higher rate for all those with a high-risk family history.”