Generative and Agentic AI in Insurance: Breaking Down the Risks and Opportunities

In the latest episode of What’s Brewing, Chris Accetta and David Geller welcome David Seaton, VP of Predictive Analytics and Modeling at IAT Insurance, to demystify artificial intelligence (AI) and its growing role in the insurance industry. As AI technology rapidly evolves, the discussion explores its impact, risks, and best practices for ethical deployment.

Tune into the episode here.

Understanding AI in Insurance

AI is no longer a futuristic concept—it’s here, and it’s reshaping industries, including insurance. The conversation starts by clarifying AI’s different types, particularly Generative AI (which creates text, images, and more) and Agentic AI (which performs tasks autonomously). While these innovations offer efficiency and automation, they also introduce new challenges, including ethical concerns and liability risks.

Key Risks: What Insurers Need to Watch

The discussion highlights two major risk areas:

• Input Risks: These arise from how AI is trained, particularly concerning data accuracy, bias, and copyright issues. With proprietary training data often hidden from public scrutiny, insurers must be cautious about how AI models are being trained.
• Output Risks: This includes the potential for AI-generated misinformation, fraudulent claims (such as AI-altered accident photos), and even chatbot errors that could create unintended liabilities. The episode also touches on the emerging issue of “AI washing,” where companies falsely claim to use AI for competitive advantage—potentially leading to lawsuits.

How AI is Changing Underwriting and Claims

Despite its risks, AI presents significant opportunities for insurers. It’s already being used to enhance underwriting efficiency, analyze risk more effectively, and automate claims processing. However, AI isn’t replacing human decision-making—it’s augmenting it. The key takeaway? Insurers should embrace AI but do so thoughtfully, ensuring strong governance and risk management frameworks.

Final Thoughts: Embrace AI, But Stay Cautious

The episode closes with a reminder that knowledge is power. The more insurance professionals understand AI, the better they can mitigate risks and leverage its advantages. Having a clearly defined AI policy is crucial for both businesses and insurers as they navigate this evolving landscape.

Want to dive deeper into the conversation? Listen to the full episode of What’s Brewing now!