Discussion Paper: AI and insurability

The Actuarial Association of Europe – AAE – has published a discussion paper on artificial intelligence and the challenges that the increasing spread of technological innovation brings to the insurability of risks.

Insurability depends on the ability to assess the risks faced by the policyholders. Policyholders share the same risks: each one pays a premium that corresponds to the risk, in order to obtain compensation in the event of a loss. Without adequate data and information, it is not possible to accurately ascertain the level of risk and the appropriate price of the coverage. If prices are not properly defined, the policyholders will either have an inappropriate surplus or a deficit that will undermine its ability to pay damages.

The paper therefore aims to analyze the topic not only by explaining the concept of insurability, taking into account the most advanced technological tools, but also by analysing the relationship between insurability and new data processing technologies.