BMA invites engagement on AI/machine learning
More than half of insurance groups and the broader commercial market plan on using artificial intelligence/machine learning (AI/ML) within the next 5 years, according to a new report by the Bermuda Monetary Authority.
In late 2021, the BMA conducted a market-wide survey with commercial insurers and insurance groups to gather information about the sector’s use of AI and ML technologies in their respective operations. The survey was also extended to small commercials, innovative insurers and intermediaries, which usually employ a digital-first approach in their operations, frequently utilising AI/ML systems.
While the survey results indicate that 38% of respondents currently use AI/ML in their operations, this area requires attention as 54% of respondents expect to be using AI/ML in their operations within the next 5 years. This should allow the BMA and the market sufficient time to adapt and ensure frameworks remain credible and fit for purpose.
In its Bermuda Insurance Sector Artificial Intelligence and Machine Learning Survey–2022 Report the BMA says the acceleration of digitalisation in the financial services sector has brought about new ways and means to improve insurance companies’ operations, including the use of AI/ML systems.
It continued: “The BMA recognises that AI/ML systems create opportunities, including discovering additional risks and perils leading to new insurance products, a more streamlined insurance life cycle brought about by increased interconnectedness and new ways to underwrite traditional lines. Alternatively, AI/ML systems carry an increased risk profile, particularly in cybersecurity, data privacy and legal and compliance uncertainty, not to mention ethical considerations and the risks of unintended outcomes.”
The BMA invites the industry to engage with its Innovation Working Group or their supervisory contacts to share further insights or concerns regarding AI/ML systems. The BMA welcomes comments, suggestions and in-depth discussion on this area, allowing the regulator to continue making informed decisions as it maintains and enhances its regulatory framework and supervisory approach.
