Swiss Re Institute report predicts AI impact on health industry

Insurers are advised to take advantage of this to expand cyber risk offerings.

The global health and pharmaceuticals sector will face the most significant impact from artificial intelligence (AI) over the next decade, a new report by Swiss Re Institute indicated. 

"While IT services are currently the most affected by AI risks as a pioneer in this area, this is set to change as the use of technology becomes more widespread across all industries, such as in health and mobility. Insurance companies are therefore starting to introduce specific cover for AI performance failures – one of the biggest risks for all industries,” commented Christoph Nabholz, Chief Research & Sustainability Officer at Swiss Re, in a press release.

In the health sector, AI is increasingly used to streamline tasks such as administration, patient monitoring, diagnosis, and drug development. However, the risks are also rising, with potentially serious or fatal consequences. 

Flawed or biased AI algorithms could lead to misdiagnosis, resulting in severe illness or loss of life.

The report “Tech-tonic shifts: How AI could change industry risk landscapes” identifies 'mobility and transport' as the second most at-risk industry, largely due to AI-powered connected and automated driving in complex urban environments.

 'Energy and utilities' rank third, as AI is crucial for the net-zero transition, supporting electrification and smart grid development.

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"The benefits of AI are significant for a broad range of industries, but there are also risks that can lead to potential vulnerabilities. Given its role as a shock absorber, the re/insurance industry has an important role to play in addressing AI-related risks and helping build the digital trust needed to harness the full potential of such emerging technologies." Pravina Ladva, Group Chief Digital & Technology Officer at Swiss Re, also said in the press release.

The Swiss Re Institute said that Insurers are beginning to introduce specific AI products, particularly for performance risk. 

There is considerable potential for expansion in this area. Cyber risk overlaps with AI exposures, potentially leading to new types of insurance coverage. Insurers will also need to monitor established lines like property and liability for losses caused by AI failure or intellectual property risks.