Insurers are embracing Generative Artificial Intelligence (GenAI) to automate tasks, personalize services, and gain insights across various business functions. Initial deployments focus on lower-risk areas like actuarial, claims, IT, marketing, and finance. However, the widespread adoption of GenAI presents unique risks, including data security, privacy threats, and regulatory concerns. Challenges arise from biases in large language models (LLMs), data breaches, and the opacity of complex models. An effective governance model and risk management strategy will be a leading practice for organizations that leverage GenAI in insurance as a competitive advantage and to meet their innovation goals by harnessing the power of these uniquely transformational technologies.

Generative AI has the potential to revolutionize the insurance industry. While many insurers have moved quickly to use the technology to automate tasks, personalize products and services, and generate new insights, further adoption has become a competitive imperative.

However, as insurers expand their use, they will need to adopt a governance model and risk management approach to address a unique and varied set of risks, including data security, privacy threats and regulatory concerns about ethics and bias, among others…