The European Insurance and Occupational Pensions Authority (EIOPA) has published a report called ‘Artificial intelligence governance principles: towards ethical and trustworthy artificial intelligence in the European insurance sector’.
The report has been written in the context of the proliferation in the use of artificial intelligence (AI) in insurance and the use of Big Data in underwriting. EIOPA refers to evidence that the growth in the use of AI has been exacerbated by COVID 19.
EIOPA’s report seeks to focus on what is ‘fair’ between the main stakeholders in an insurance activity. In insurance this will be the prospective policyholder, the insurer and the pool of insured risks.
EIOPA’s Consultative Expert Group on Digital Ethics has developed six AI governance principles to promote the ethical use of AI insurance. The principles are accompanied by additional guidance for insurance firms on how to implement them in practice throughout the AI system’s lifecycle.
The principles are:
- Fairness and non-discrimination
- Transparency and explainability
- Human oversight
- Data governance of record-keeping
- Robustness and performance
The report will be important for firms applying AI in their systems and will likely act as a yard stick for best-practice. UK firms should review the report as it builds upon existing FCA papers on the use of AI and will provide helpful guidance on what is and is not acceptable in terms of how AI is applied to insurance activities.
View: EIOPA publishes a report on AI governance principles for the European insurance sector