Study: Artificial intelligence can endanger companies

On the one hand, artificial intelligence-supported software can reduce the cyber risk for companies through better detection of attacks, experts at Allianz subsidiary AGCS emphasize. However, it could also encourage such attacks by making it easier to plan and execute them on digitized businesses. A single hacker attack - or even a programming error - could be replicated on numerous computers.

This would make major cyber incidents more likely in this country as well. According to Lloyd's, this could result in damages of more than USD 50 billion. A half-day outage of a cloud provider alone could cause damages of around 850 million US dollars. In its new study "The Rise of Artificial Intelligence: Future Outlook and Emerging Risks", Allianz Global Corporate & Specialty (AGCS) identifies the benefits of the increasing implementation of AI in business and society, but also points out the emerging risks posed by the new technology.

Autonomous vehicles

In the case of autonomous vehicles, too, experts are placing high expectations in artificial intelligence. For example, the new technology could largely eliminate human error as the main cause of road accidents. Nevertheless, it remains largely unclear who is liable in the event of an accident and what ethical principles autonomous vehicles should follow in dilemma situations when the health and lives of other road users are at stake.

According to the AGCS experts, the insurance industry has a key role to play in minimizing or insuring against new risks posed by AI applications. Traditional coverages must be adapted in order to protect both private individuals and companies accordingly, the study continues. In addition, insurers must be able to offer companies better solutions for such risks as cyberattacks, business interruptions, product recalls and reputational damage.

For example, Allianz experts believe that new liability insurance models are likely to prevail that place greater obligations on manufacturers and software providers and limit the strict liability of consumers.

And yet: "AI has enormous potential for insurers. Initially, it will support the automation of processes to speed up and improve policy issuance or claims handling for customers," emphasizes Michael Bruch, Head of Emerging Trends at AGCS. "Whether for business, politics, mobility, health, defense or the environment, AI brings multiple benefits, but also potential risks. We urgently need preventive risk mitigation measures to maximize the net benefits of mass deployment and reduce unintended side effects," the expert urges.