After a warm welcome from IIG’s Jabulile Mtimkulu, Zaid Bhana was introduced and began laying the foundation for the topic of the day.
Zaid started his professional career with a retail insurance broker in South Africa in 1986. In 1989, he joined the Commercial Union (later known as CGU), where his responsibilities included corporate casualty lines underwriting, technical and product training, and risk management. In 2000, he joined Swiss Re Africa as a casualty facultative underwriter, a role that later incorporated casualty treaty underwriting. Since late 2009, he has been based at Swiss Re in Zurich, Switzerland.
Zaid began the session by explaining that the world is moving at an ever more rapid pace, and that we are privileged to be on the cusp of a new chapter in the way that the world does business. This is evidenced by the increasing prevalence of shadow banking (less regulated forms of banking like trading platforms) and the fact that decentralized finance is further pushing this new chapter in our “business as usual” with assets like crypto, stablecoins, NFTs, and CBDCs being purchased and exchanged.
This leads us to questions like, “How do we quantify and account for these going forward?” Establishing value is critical in insuring assets like these. The prospect becomes even more interesting when considering that individuals managing these assets on behalf of a third party will need professional indemnity cover, and we as an industry will need to account for these difficult-to-establish asset values.
Zaid then moved on to the fascinating enhancements in the area of generative A.I., explaining that the genie is out of the bottle and there is no putting it back. We need to deal with generative A.I. and harness it while understanding the pitfalls that exist, with specific reference to how our view of intellectual property needs to morph with the data samples that A.I. uses. Source of content validation, bias from the source material, accuracy, potential plagiarism, and deep fakes are all important factors to carefully consider when using generative A.I. Finance, legal, manufacturing, and medical were highlighted as industries to be on the lookout for disruption by generative A.I. in the immediate future, if not already being disrupted.
The presentation then moved on to some interesting legal cases related to generative A.I. The examples included the New York Times taking legal action against OpenAI for copyright infringement, with another case involving a law firm based in the United States where legal practitioners used generative A.I. to draft case documents, and the A.I. fabricated case law, which the practitioners presented as fact.
Zaid closed the session by highlighting the groundbreaking legislation being promulgated by the European Union. This legislation will impact any A.I. products that affect any of the member nations of the EU, affecting the developers, distributors, and users of such technologies. The act prohibits the recognition of emotions through A.I. and any form of social scoring processes. This creates entirely new career types and opportunities, with ethics committees and related professional individuals becoming a new potential career path.
Do our current liability insurance product wordings cater for this? Zaid thinks not, and he closed by emphasizing that the industry needs to pick up pace if we wish to avoid being caught unprepared for the inevitable new risks that this legislation and technology represent to our industry.
A big and heartfelt thank you to the sponsor, Swiss Re for making this informative and valuable insights session possible.
Article Written by Jason Arnott | IIG Ambassador: Education
