Back when Munich Re launched the industry’s first insurance coverage for artificial intelligence (AI) at the end of 2018, the policy, aiSure, found few takers. In subsequent years, as more companies digitally transformed their business and AI models and machine learning tools went mainstream, business picked up, prompting Munich Re last year to form a dedicated AI insurance team to scale aiSure and develop additional AI insurance policies.
Executive SummaryThe global market of AI solutions is poised to skyrocket, and the prospect of having viable risk transfer solutions available to absorb the risks of AI-generated errors may be one more catalyst fueling exponential growth. Munich Re was the first to market with insurance that backs the performance guarantees of AI providers. The coverage serves as an adjunct to the risk identification and mitigation services provided by AI software attestation and audit firms, which are seeing high demand. Insurance Journalist Russ Banham reports on both the services and the novel insurance offerings.
Why is this important?
Chief among the reasons is that Munich Re’s estimable reputation and clout is sure to inspire other insurers and reinsurers to develop innovative AI-based products, culminating in a new insurance market. Given the rapidly growing use of AI software by companies on a function-by-function basis, viable risk transfer solutions absorbing the risks of AI-generated errors are sorely needed.
The global market for AI solutions is expected to grow from $87 billion in 2021 to $120 billion in 2022, then skyrocket to more than $1.5 trillion by the end of the decade, according to Precedence Research. The market research firm cited rising demand for AI technologies in banking, financial services, manufacturing, advertising, insurance, retail, healthcare, food and beverages, automotive, logistics, robotics, cancer diagnostics, and pharmaceutical. In short, virtually every industry sector.