AI in insurance: keeping it safe
The European Insurance and Occupational Pensions Authority (EIOPA) has launched a consultation on its Opinion on Artificial Intelligence (AI) governance and risk management, offering guidance on how insurers should manage AI within existing sectoral regulations. The Opinion provides clarity on AI applications that are not classified as high-risk under the AI Act, ensuring AI systems in insurance remain transparent, fair, and accountable. The consultation is open until 12 May.
AI is already transforming insurance, from automated claims processing to fraud detection and risk assessment. However, without proper governance, AI can introduce risks, such as bias, opaque decision-making, and unreliable outcomes. EIOPA’s Opinion stresses the need for sound data governance, explainability, and proportional risk management. This ensures AI is used responsibly and in line with consumer protection principles.
For AI to function effectively in insurance (or any other financial industry), it requires high-quality, structured data—just as a self-driving car needs well-marked roads. XBRL and digital reporting standards are essential in providing structured, machine-readable financial and regulatory data, making AI-driven decisions more reliable and transparent. Without structured data, AI risks operating in the dark, increasing the potential for errors and misinterpretations in areas like pricing, claims assessments, and compliance.
As AI adoption in financial services accelerates, structured data and digital reporting frameworks like XBRL will be crucial in ensuring AI systems remain accountable, efficient, and safe. EIOPA’s consultation offers an important opportunity for stakeholders to shape the future of AI governance in insurance.
Learn more and respond to the consultation here.
