Underwriters in the Lloyd’s market are increasingly alert to potential losses linked to artificial intelligence as its use grows across business operations. Professional indemnity, cyber, product recall and accident and health lines all show signs of emerging AI-related exposures.
The Lloyd’s Market Association captures these views in its first ever report on AI loss scenarios – the results of which are published today.
The LMA’s survey was carried out among 144 managing agent respondents, 94% of them underwriters, assessing the viability, potential magnitude and overall impact of AI loss scenarios, alongside insureds’ current use of AI and risk management practices.
Professional indemnity carries the highest potential impact, reflecting widespread deployment of AI tools in professional services and the risk of sizeable losses if erroneous advice causes harm. Cyber underwriters highlight system downtime from AI malfunction as plausible, though effective risk management could limit impact. Product recall risks remain low today due to limited AI in design and manufacturing, but adoption is expected to grow. Accident and health claims linked to self-driving vehicles appear plausible, though views differ on severity.
David Powell, head of technical underwriting at the LMA, said: “Use of AI software is accelerating across every sector and underwriters are already seeing early indicators of how these technologies could contribute to future claims.
“This opinion survey demonstrates that, while current levels of concern remain moderate overall, there is a clear expectation that exposures will grow as AI becomes more deeply embedded in operational and decision-making processes.”
It is hoped that the findings of this survey will help inform further market discussion on how best to assess, manage and underwrite these potentially considerable emerging risks.
The LMA's Understanding AI Exposures: AI Loss Scenarios Survey results may be accessed here: https://lmalloyds.com/campaigns/understanding-ai-exposures-ai-loss-scenarios-survey-results/
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