Founder of AI Code of Conduct emphasises importance of ethics

In the ever-evolving landscape of artificial intelligence (AI), the debate over its impacts continues to gain momentum. An incident in 2023 involving a major health insurer sparked controversy. A class action lawsuit claimed that AI was used to reject 300,000 claims within two months. The alleged average processing time of 1.2 seconds per case raised concerns about the due consideration of policyholders’ claims, leading to accusations of an abuse of process.

Whilst the details of the case remain uncertain, it is necessary to consider the potential benefits and drawbacks of AI in decision-making processes. If the insurer is using AI, it will likely find it efficient and cost-effective. On the other side, policyholders may be frustrated with the perceived lack of transparency and empathy from the insurer.

This incident led to a consideration of the need for a standardised approach to AI deployment, specifically in insurance claims. As a result, the idea for a code of conduct for claims was born. The code would aim to guide insurers and their suppliers whilst reassuring claimants about the ethical use of AI. Over the past six months, collaborative efforts amongst 127 insurance professionals has resulted in the formulation of this code. This signals a proactive step towards responsible AI implementation across the industry.

“The AI Code of Conduct is a representation of how collaboration in the insurance sector can effectively impart change for the better.”

Prior to the launch of the code of conduct, members of the steering committee spoke with Claims Media about the necessity of monitoring AI. Ian Hughes, founder of Consumer Intelligence, explained that whilst AI is effective “you have to be a parent to AI”. This suggests that, whilst AI is an advantageous tool, it must be taught ethics in order to be beneficial for the policyholder.

Eddie Longworth is the founder and director of JEL Consulting and initiator and group facilitator for the new AI code of conduct. He stated: “On a personal level, I am delighted to have initiated and facilitated the creation of this code. More generally though, it is not unusual for the insurance industry to be guilty of ‘shooting itself in the foot’ and so if we can all collaborate to get ahead of the curve on the proper use of AI in claims then we will have succeeded in building a small piece of the bond of trust that we must have with our policyholders.”

Eddie and the rest of the committee emphasised to Claims Media that this code will be revised as technology advances. There will be yearly revisits in order to address changes. As Eddie states, “Anyone with a stake in the arena will be encouraged to join.”

The AI Code of Conduct is a representation of how collaboration in the insurance sector can effectively impart change for the better. This development will not only regulate the use of AI for the insurer, but will also bring peace of mind to the policyholder in an increasingly automated world.

Image: Eddie Longworth, founder and director of JEL Consulting and initiator and group facilitator for the new AI code of conduct.

Emma Cockings Emma is a content editor for Claims Media. Emma is a experienced writer with a background in client-centric personal injury for a major firm. She has attended and reported on multiple brokerage events throughout her career.