AI and Liability

Is this different from more general liability issues?  Does it matter in how the technology is seen by consumers, patients?   As intelligent? .   In the last AI efforts we talked with with company lawyers.  Insurance Implications?  Different than algorithms in general?  Embedded Bias? 

ACM OPINION

Who Is Liable when AI Kills?   By Scientific American, February 21, 2023

An autonomous vehicle drives on a road using its sensors to understand its surroundings.

The benefits of AI should not be undercut by poorly developed algorithms: 21st-century AI demands a 21st-century liability system.

Credit: Sergii Iaremenko/Science Photo Library/Getty Images

Our current liability system—used to determine responsibility and payment for injuries—is unprepared for artificial intelligence (AI). Liability rules were designed for a time when humans caused most injuries.

With AI, errors may occur without any direct human input. The liability system needs to adjust accordingly. Bad liability policy will not just stifle AI innovation; it will also harm patients and consumers.

From The Scientific American

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Technology in Insurance Sector (India)

 Would think that AI would also change things strongly here.  How specific this is to India is unclear.

ACM NEWS

Technology Innovation in the Insurance Sector

By Express Computer (India), March 14, 2023

The insurance sector has experienced a paradigm shift because of big data analytics.

The insurance industry has long been known for its traditional, risk-averse nature. However, the emergence of technology has brought about significant changes in recent years. As consumers become more tech-savvy and demanding, the insurance industry has begun embracing technology in order to maintain its competitiveness and improve its services. A new wave of innovation known as "insurtech" has evolved, which refers to using technology to enhance and streamline insurance services. These companies are disrupting the traditional insurance market with new business models, products, and services. Thus, in order to provide specialized and effective insurance solutions, they use technology like big data, artificial intelligence, and machine learning. Also, these businesses offer their clients a user-friendly and practical digital experience, which is critical in today's fast-paced world.

The insurance industry has benefited from technological innovation by enhancing ease, personalization, transparency, efficiency, profitability, and risk management. To fully utilize the potential of technology in the insurance sector, however, issues including legislation, client uptake, and data privacy and security must be addressed.

From Express Computer

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AI Ushers in next-gen Prior Authorization in Healthcare

Had yet to see this specific kind of application

AI ushers in next-gen prior authorization in healthcare in McKinsey

Healthcare payers recognize prior authorization as a core administrative process that’s ripe for improvement with artificial intelligence.

Healthcare payers recognize that prior authorization (PA) is ripe for improvement. AI-enabled PA design may deliver substantial financial, user-experience, and care benefits.

(Excerpt) 

Artificial intelligence—the simulation of human intelligence by machines—is rapidly becoming a key enabler for businesses to deliver consistent, high-quality, and efficient outcomes. Healthcare organizations across the value chain are making significant strides in embedding AI capabilities in areas such as diagnostics, medical imaging, and lifestyle management.1

One healthcare process that could potentially be improved through the application of AI is prior authorization (PA). PA is a core administrative process in which payers require providers to obtain preapproval to administer a service or a medication as a condition of coverage. The goal of PA is to ensure members receive the most appropriate care for their medical needs in alignment with the latest medical evidence and guidelines. PA can prevent wholly inappropriate service utilization or, more commonly, ensure that first-line treatments are attempted before escalating to more invasive or risky therapies.  .... ' 

Ransomware: Insurance Might Pay

And of course will foreign plays admit guilt for hostile actions?  And surely insurance premiums will increase. 

Via Schneier, with further comments:

The insurance company Ace American has to pay for the losses:

On 6th December 2021, the New Jersey Superior Court granted partial summary judgment (attached) in favour of Merck and International Indemnity, declaring that the War or Hostile Acts exclusion was inapplicable to the dispute.

Merck suffered US$1.4 billion in business interruption losses from the Notpetya cyber attack of 2017 which were claimed against “all risks” property re/insurance policies providing coverage for losses resulting from destruction or corruption of computer data and software. ...,, '

Healthcare Company Anthem Transforms Digitally

Heathcare application is about numbers, analytics,  resources,  ....  So it makes sense to tie it closely to technology for improvement.   Here an example from McKinsey:

An insurance company transforms itself by putting technology first   

The deep transformation of healthcare company Anthem presented unique challenges. Here’s how the company set up its strategy to meet them.  ... " 

Insurance Companies Help Protect the Home

I was asked some time ago by a commercial insurance company if I though it would be useful to offer commonly available assistants that could be linked to home protection.   Have been testing that now for several years.  More and easy to use infrastructure and specific setup skills are still needed.  And clear incentives for its use.

Notion IoT Sensors Let Homeowners Design Their Own Home Intelligence
Travelers Insurance is the latest insurance company to offer home monitoring from the technology startup, at a discounted rate so users can select what they want to monitor when they're away from home.    By Claire Swedberg in RFID Journal

Aug 31, 2018—Traveler's Insurance is offering its clients a discount on Internet of Things (IoT) technology that enables them to track conditions within their home, automatically and remotely, at a cost of $50. The home-monitoring system is provided by technology company Notion. Travelers is one of a handful of insurance companies to provide the Notion system, which offers cloud-based wireless sensor data to automate homes.

The Notion Home Monitoring System leverages IoT technology consisting of multiple sensors that transmit data to a single hub that, in turn, uses a home's existing Wi-Fi network to forward the data to a cloud-based server. Users can then access or receive alerts regarding data from the sensors using a Notion app on their Android- or iOS-based devices.... " 

50 Plus Examples of Business Blockchains

Interesting to see the breadth,   here the descriptions are not consistent, but instructive.  'Taking over' is an overstatement.  'Showing they can be useful' would be more accurate.  I see only one example clearly to use a 'smart contract', one by AIG in the Insurance domain.

50+ Examples of How Blockchains are Taking Over the World
Posted by Kelly Quintana in DSC
Article written by Matteo Gianpietro Zago.
An infographic and text.... " 

Managing Insurance with a Blockchain

Why use the architecture of Blockchain to manage insurance?   A well told piece makes the case.  Said to be the first significant application in insurance.

A well stated insurance application, with link to an excellent tech white paper.  Insurance is often a leader in digital applications and also in analytics, since insurance grew out of direct statistical methods, both in its management and measurement.

ANZ and IBM build insurance management blockchain for New Zealand   By Kyt Dotson in SiliconAngle

The Australia and New Zealand Banking Group along with IBM Corp. and banking company Suncorp New Zealand Ltd. today announced the development of blockchain distributed ledger technology aimed at easing payments and reconciliation in the insurance industry.

Blockchain technology is used across numerous industries as a way to secure distributed data in a decentralized manner that also makes it difficult to tamper with. Each transaction sent through the blockchain is cryptographically secured in a ledger that is shared between multiple parties and transactions are not added until all members agree.

After the transaction is added, each subsequent transaction strengthens that security. The blockchain also becomes a historical record of all past transactions that can be audited by third parties and regulators to ensure legal compliance or investigate data patterns.

A press release from IBM and ANZ claimed that this is the first insurance industry-related blockchain of its kind released in New Zealand. .... " 

White paper on the effort:

Distributed Ledger Technology for Reconciliation between Insurance Companies and Brokers.

ANZ Bank New Zealand Limited’s (‘ANZ’) Proof of Concept demonstrates how distributed ledger technology (‘DLT’) can solve inefficiencies in the reconciliation of bordereau statements, which detail the insurance policies that brokers manage, and the corresponding payments to insurance companies. DLT can be used to create a ‘single source of truth’ for brokers and insurance companies, removing the need for reconciliations in the process and providing greater visibility for more informed management decisions ... " 

Wal-Mart Humana Partnership

New partnerships, and in-store implications.

5 Ways A Walmart-Humana Partnership Could Change Everyone’s In-Store Experience   By Bryan Pearson 

If Walmart’s reported interest in acquiring or expanding its relationship with health insurer Humana HUM +1.44% is to materialize, it would be the widest-reaching move toward transforming retail from a seller of goods to a seller of health. And that would mean the traditional retail store, across a variety of segments, would change.

Walmart joins other retailers pursuing the insurance industry, including CVS Health, which is in the midst of acquiring Aetna, and Amazon, which is partnering with JPMorgan Chase & Co. and Berkshire Hathaway to establish an independent company to provide affordable healthcare to employees.

The potential difference is while CVS and Amazon are focused specifically on providing healthcare services to consumers and employees, Walmart and Humana could focus on home health and preventing disease.   ... " 

AI and Insurance

Some of our earliest work in advanced analytics and AI work dealt closely with risk and thus with elements of insurance.   And then talking to the insurance industry, so this DSC is interesting,  Insurance and risk is all about detecting and using complex patterns.

Artificial Intelligence (AI) Disrupts the Traditional Insurance Industry    Posted by Deena Zaidi  in DSC

relying on traditional virtual assistants. But with the advent of improved analytics, insurance technology startups (better known as Insurtech)are paving way for smarter and more innovative platforms.

With strong data analytics, Insurtech startups seem to have no lack of funding. According to a report by KPMG, since 2015 the interest in Insurtech has increased dramatically. The report shows that Insurtech startups attracted more than $1.7 billion worldwide in 2016.   .....  "

And a further look by regional and country participation.

Blockchain and Insurance Industry

Blockchain Could Make the Insurance Industry Much More Transparent
10 Voices - HarvardBusiness.org by Dante Disparte  

While Edward Lloyd is largely credited with commercializing the insurance industry, with the creation of his namesake firm, Lloyd’s, over 330 years ago, the original concept of spreading risk (or “mutualizing”) goes back even further. Hundreds of years before Lloyd’s was formed, Chinese merchants would spread their valuable cargo across multiple vessels, with each one carrying an equal share of another merchant’s goods. In this manner, no single loss would be catastrophic. This spread of risk, of course, also prevented a merchant from absconding with his ship’s goods and never reuniting with the other traders; he’d have too much to lose. In effect, they all had skin in the game, which remains one of the most elusive elements of modern finance. Both then and in 1686, when Lloyd’s was born in a London coffee house, the global insurance industry was a business of utmost good faith, as it remains today.

Thus a trust and efficiency engine like blockchain technology has the potential to drive radical change in the insurance industry while improving transparency and outcomes across the entire value chain. Intermediaries or “trust brokers” do not have to be written out of the equation — or “disintermediated” — as many blockchain enthusiasts argue. Rather, they can become early adopters of the technology. Admittedly, this shift will be hardest on the established monoliths in the industry, for it will require uncomfortable transparency and price corrections in their business models. This will be toughest on the portions of the industry that are the least differentiated, where consumers often decide based on price: auto, life, and homeowner’s insurance. However, even these commodity offerings can find ways to innovate and survive.  ..... " 

Minimizing Disaster Insurance Risk

Podcast

Wharton's Howard Kunreuther discusses his report on the insurance industry surrounding catastrophic events.

Hurricane Matthew wreaked havoc in Haiti before causing massive damage to parts of the southeastern United States earlier this year. In the Carolinas, flooding damage from the storm was assessed at more than $1 billion. Insurance against a catastrophic event, such as a hurricane or earthquake, often is not purchased by consumers or purchased too late. The most common reason is that homeowners believe the odds are stacked in their favor. Howard Kunreuther, Wharton professor of operations, information and decisions and co-director of the Wharton Risk Management and Decision Processes Center, put together a report that looks at the insurance industry surrounding catastrophic events. He recently appeared on the Knowledge@Wharton show, part of Wharton Business Radio on SiriusXM channel 111 to talk about what can be done to improve coverage and minimize risks. .... " 

A Look at Some New Dimensions of Fintech

Just sent to me by a Fintech contact, made me think:

Lots of places for innovation to play out in financial/insurance space.  Consider insurance defined as a means of dealing with a portfolio of risk.

Also looked at smart contract space ....  a place between compliance and finance and risk.... Is this where the Hyperledger dwells?   ....

MicroInsurance

This and commentary on it made me think.    Recently dealt with a related  insurance problem:

"  Explore New Kinds Of Insurance ... 
Customers and businesses are desperately seeking workable solutions to their problems. With microinsurance, they have the ability to handpick features that offer the right amount of financial protection for the shortest period of time.

Take Opendoor, the startup radically changing the way we buy and sell homes. Not only does the company buy your home over the web instantly and let you close in three days, they also guarantee handling every aspect of the tedious escrow process for you, saving you time, money and headaches.

We’ve also seen companies like Oscar that, in less than five minutes via mobile, connect users with quality and easily accessible healthcare insurance.

Affirm and Klarna offer a new form of consumer financing during checkout, insuring the seller against any defaults in payment. ... ? 

Companies Reaching out to Millennials

In the HBR:  How established companies, as in  hospitality and insurance,  are reaching out to Millennials.  Need for a new kind of talking.  We met with their innovation people five years ago, and the changes were understood even then.  There is also a significant contingent of people of all ages behaving this way.  Technology integration was and is a strong component.     Changing both the style, frequency and content of conversation.

" .... By now, we have all heard a great deal about marketing to Millennials. Where do they shop? The internet. What don’t they like? Being pitched to. How do we know what they do like? They tell their friends (and the world) on Instagram, Facebook, Twitter, Pinterest, Vine, and other platforms that many non-Millennials haven’t even heard of. If they don’t like a company’s product, or an experience they had, the whole world will know about it. Fast. ... " 

Cyber Insurance Policies

In the CACM:   A good overview of the direction and providers of Cyber insurance policies.

" ... The cyber attacks carried out against Sony, Target, Home Depot, and J.P. Morgan Chase garnered a great deal of press coverage in 2014, but data breaches, denial-of-service attacks, and other acts of electronic malfeasance are hardly limited to large, multinational corporations. However, it is the high-profile nature of these breaches—as well as the staggering monetary costs associated with several of the attacks—that are driving businesses of all types and sizes to seriously look at purchasing cybersecurity insurance.

Currently, the global market for cybersecurity insurance policies is estimated at around $1.5 billion in gross written premiums, according to reinsurance giant Aon Benfield. ... "

Clinical Machine Learning at NYU

Examining more Closely.
Via Principal Investigator David Sontag at NYU:

 Clinical machine learning
Our group is particularly interested in machine learning problems motivated by clinical medicine. We work on algorithms for electronic phenotyping in electronic health records, natural language processing from clinical text, disease progression modeling, and predictive analytics on health insurance claims. Our aim is to develop robust methodologies that work directly with the unstructured data found in electronic medical records, and which generalize between institutions without significant manual effort. We collaborate closely with the Emergency Medicine Informatics Research Lab at Beth Israel Deaconess Medical Center and with Independence Blue Cross. .... " 

See my report on his September 17 talk.  Includes detailed slides.

Gamifying An Internet of Toothbrushes

I heard the general idea mentioned years ago.  Toothbrushes detecting how kids brush and gamifying the interaction to promote brushing.  Now Sonicare is taking it further.  Link the brush to the internet and make it a game.  With possible links to insurance?  To a network of Dentists?   In Adage.

Analytics Magazine Addresses Human Curiosity in AI

Analytics Magazine, Jul-Aug 2015

Building Human Curiosity into A.I.
by Scott Zoldi
Self-learning models: How neuro-dynamic programming enables smart machines to think ahead.

Predicting Patient Experience  
by Sagar Anisingaraju and Mo Kaushal
Why narrative data is a healthcare goldmine: Four reasons to feel confident about the "consumerization" wave.

Curing What Ails the Healthcare Industry
by Charlie Bitzis
Interaction analytics is transforming health insurance: Four key areas where analytics is driving change.

Network Analytics for Everyone
by Will Towler
From social media to healthcare, more and more fields are turning to network science for greater insight.

Networks vs. Fraud: Connecting the Dots
by Bart Baesens, Véronique Van Vlasselaer and Wouter Verbeke
Well-constructed analytical models useful in thwarting fraudsters and their complex but revealing patterns.

Thinking Differently About Risk

Risk is often not thought about consistently.  In some cases it derives from actuarial tables, in other cases straight from the gut.   It has to deal with both common repetitive events and black swans of unexpectedness.   Insurance protection and cosmic events. . How do we manage this portfolio of expectation?

Thinking Differently About Risk
Risk factors, alternative tools, and the risk manager’s increasingly important role.

The risk profiles of companies operating today – particularly multinationals, but by no means limited to them – are radically different than they were just a few short years ago.  Many factors are driving the change, including several mentioned below.  But the underlying reason can be described in two words: growing complexity.  Managing this complexity and the concomitant risks that go with it requires a broader conception of insurance and its overall role in the risk management mix than in the past.    ... "