CIO chat: What insurers need to know about AI governance
In this interview, Miguel Edwards, 5M Consulting, and Anthony Habayeb, CEO and co-founder of Monitaur, talk about the importance of AI governance as an enabler of growth. Companies that are more advanced in their AI governance adoption are seeing 2 to 3x better results in their AI return on investment. They also discuss the role of CIOs in AI governance and the future of AI in the insurance industry.
AI governance is no longer a theoretical boardroom issue. As regulators move from guidance to enforcement, weak oversight of artificial intelligence is fast becoming a live directors’ and officers’ liability risk, with implications for valuation, disclosure and investor trust. That shift is underlined by recent regulatory action against X over its Grok AI chatbot. French authorities have raided offices linked to the platform, while UK regulators have opened fresh lines of inquiry into its data use and content controls. While the investigations focus on technology and compliance, the exposure they create is increasingly landing at board level.
Alongside efforts to define and enact legal and regulatory requirements to manage AI risks and encourage voluntary AI governance through norms and standards, policymakers and researchers have begun to turn attention to private levers of governance like insurance against AI risks and liability. While many have considered how artificial intelligence will impact and transform the insurance industry, fewer have explored how the insurance industry may shape the development and integration of AI — including adoption of safeguards against the risks AI may introduce or amplify.
The recent executive order proposing unified federal governance of AI laws has created more uncertainty for insurance companies, many of whom were already unsure about their own compliance requirements, according to legal experts across the U.S. “Until the order is fully implemented and that enforceable federal regulatory scheme is in place, it’s going to create some uncertainty in how AI used by insurers is actually going to be regulated,” Karin Aldama, attorney and shareholder, Gallagher & Kennedy, said.
As Florida lawmakers dig into issues involving artificial intelligence, state Insurance Commissioner Michael Yaworsky wants to make sure regulators can properly oversee AI use by insurance companies. “Responsible AI governance is crucial,” Yaworsky told the Senate Banking and Insurance Committee last week. “I’m not an opponent of AI, but I do think it needs to be responsibly deployed. There are some companies that I think are doing it in a much more responsible manner than others.”
Last week, I asked Sam Altman a question that has defined my career. I was sitting in an intimate OpenAI builder town hall with about 50 people when I raised my hand: How can AI be used to solve long-standing economic gaps, like the gender wage gap? His answer was immediate. AI, he said, should be “an equalizing force in society.” I agree. But right now, it isn’t. Right now, AI is making the gender gap worse. The numbers are stark. A study published in the Proceedings of the National Academy of Sciences found that women are 16 percentage points less likely than men to use generative AI tools for work. According to Deloitte, only 28% of women report using AI regularly, compared to 45% of men. Mobile download data shows women comprise just 27% of ChatGPT app users.
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