Our next data science ethics book club is on Ethics of AI and Personal Insurance. Artificial intelligence (AI) and machine learning (ML) are increasingly used in the personal insurance industry, including customer onboarding, pricing, and fraud detection. While this offers a number of benefits, such as improved customer engagement and lower prices, there are ethical concerns around consumer privacy, hyper-personalisation of insurance, and potential unfair biases.
This book club session will aim to understand some of the pros and cons of the use of AI in this industry, identify the ethical issues, and discuss potential ways forward in which insurers can address and mitigate them.
Reading Material
You are welcome to pick from this reading list, depending on your interest and the time you have:
- UK CDEI Snapshot Paper https://www.gov.uk/government/publications/cdei-publishes-its-first-series-of-three-snapshot-papers-ethical-issues-in-ai/snapshot-paper-ai-and-personal-insurance or https://apo.org.au/sites/default/files/resource-files/2019-09/apo-nid267086.pdf
- Research paper, “[Algorithmic Audit of Italian Car Insurance: Evidence of Unfairness in Access and Pricing](https://dl.acm.org/doi/abs/10.1145/3461702.3462569”
- Research paper, “The Fairness of Machine Learning in Insurance: New Rags for an Old Man?”
- European Insurance and Occupational Pensions Authority (EIOPA) paper, “Artificial intelligence governance principles: towards ethical and trustworthy artificial intelligence in the European insurance sector”
- Chartered Insurance Institute (CII)
- Blog post, “How AI Is Transforming the Insurance Industry [6 Use Cases]”
Questions and provocations
- What are the potential benefits of the use of AI in insurance?
- What types of data do you think are “off-limits” for insurance pricing, and why? (E.g. social media data)
- New algorithmic approaches could result in some people being priced out of insurance, as risk assessments become more precise and previously unseen indicators of risk are revealed for the first time. What are the risks of this, and how do we address them?
- Should insurers be allowed to suggest lifestyle improvements to their customers?
- How can we protect customers from unfairly biased algorithms?