Insight & Analysis

Press release: AI has growing implications for European risk managers, FERMA tells EU Commission

Published: Feb 2019

4th February 2019 – The development and application of artificial intelligence (AI) has growing implications for European risk managers, the Federation of European Risk Management Associations (FERMA) has told the European Commission. Speaking from the perspective of corporate users of AI, FERMA has welcomed the overall approach to create European guidelines on AI ethics, the first in the world, that are set out in Draft AI Ethics Guidelines prepared by a High-Level Group from the Commission.

In its response to the High Level Group stakeholder consultative document on the guidelines, FERMA says it sees the draft as a starting point to efficiently manage the ethical challenges of AI.

Philippe Cotelle, FERMA board member with responsibility for digital transformation, stated: “We see the development of ethical rules as the opportunity to ensure there is accountability in the sphere of AI. We expect the professional practice of risk management to play a fundamental role in the implementation of AI to ensure that organisations conduct a diligent assessment of all risks facing an organisation using AI, including the ethical dimension, through a holistic risk management methodology.”

The 2018 FERMA Risk Manager Survey revealed that more than one-third of risk managers are already involved in identifying and assessing the risk involved with new technologies for their organisations, and FERMA expects this number to grow.

In its comments on the draft, FERMA also draws attention to the implications of AI for the ethical control in the insurance underwriting process and the opportunities and threats of AI technologies for the insurability of organisations. In particular, FERMA expresses concern that if AI is deployed in underwriting, insurers will know considerably more than the insurance buyer about how AI has been integrated into the underwriting process. “This asymmetry of information could potentially affect the ability of organisations to purchase insurance and consequently impact their business,” it says.

Philippe Cotelle adds to FERMA’s submitted comments that risk managers themselves are likely to find AI becoming part of the techniques of their own jobs, especially in risk assessment in very large enterprises. “We are at the beginning, he said, but the Risk Manager Survey found that around 9 percent of risk managers are already using AI and other technologies such as blockchain in their work.”

With these trends in mind, FERMA has planned a high level panel discussion on AI for the 2019 FERMA Forum which will take place on 17-20 November in Berlin.

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