While the work of risk management has changed dramatically over the past decade, plan for the pace of change to get more and more frenetic as artificial intelligence takes hold in the operations of large companies and governments across the globe.Executive SummaryUnderstanding how customers are using AI to manage risk will be essential for P/C underwriters who want to keep and grow key customer relationships, writes Peter Temes, president of The Institute for Innovation in Large Organizations. Drawing on information from ILO members and public reports from CargoNet, he provides examples from the world of banking and cargo transport.
Already a good deal of risk management is being made more efficient by AI. Large banks especially have built largely effective AI tools to vet contracts and business agreements for variances and hidden risks mapped against fast-changing external events—not only changing interest rates, for example, but also local weather, hard-to-observe regulatory shifts at the local and regional levels, and sector-specific shifts in the flow of capital, talent and technical capacity.
One large U.K.-based bank now monitors the emergence of new regulations touching the financial services sector—a total of roughly 1,400 such new regulations promulgated per week at the local, regional, national and EU level—and maps each against the key people inside the bank who need to know.