(USA Herald) – The insurance industry is experiencing a digital revolution, with artificial intelligence (AI) playing an increasingly role in underwriting, claims adjusting, and other key functions. However, this hasty embrace of AI is raising concerns about fairness, transparency, and bad-faith in the claims handling process.
As Samuel Lopez, an investigative and legal analyst for USA Herald, explains, “Policyholders assert that using software expressly designed to favor the insurance company is irreconcilable with the duty of utmost good faith.”
Highlighting these concerns, a webinar hosted by Strafford Publications on March 21, 2024, featured panelists who examined the grounds for bad faith claims and the substantive and evidentiary challenges stemming from the widespread adoption of AI in the insurance industry, indicating that significant concerns remain. Bad Faith and Generative Ai in the Insurance Sector
The Rise of Insurtech and AI-powered Claims
Insurtech, which stands for “insurance technology,” is a trend in the insurance industry that uses technology to allegedly enhance efficiency and customer experience. It’s known for using data analysis, the Internet of Things (IoT), and artificial intelligence (AI) to create more competitive pricing models and to process claims and policies more effectively. However, like any technology-driven sector, it faces challenges such as regulatory issues, and the potential for bias in its output.
