Category: Insurance

As artificial intelligence becomes integral to business operations across industries, companies face new and evolving risks that traditional insurance policies weren’t designed to address. Artificial intelligence insurance provides specialized coverage for the unique exposures that arise from developing, deploying, and using AI technologies.

But, what is Artificial Intelligence Insurance? Is it a singular policy? Included in another? How does it work, and how do businesses get it?

This comprehensive guide explores everything you need to know about AI insurance, from understanding coverage needs to finding the right protection for your business.

Understanding Artificial Intelligence Insurance

Artificial intelligence insurance is specialized coverage designed to protect businesses against risks specific to AI technologies. However, this coverage, as of today, generally sits within a Technology Errors & Omissions Insurance (Tech E&O) policy as what’s called an “Endorsement.” You can read more about what insurance endorsements are in this article from us here at Embroker.

As artificial intelligence has taken over many industries, and grown into its own very lucrative one, insurance providers have worked diligently to adequately cover businesses that both utilize and build AI. Generally speaking, this looked like a Tech E&O policy that was intentionally vague in order to capture as many potential risk scenarios and definitions as possible.

However, that style of coverage has proven to be largely insufficient. Specific AI insurance endorsements address the unique challenges that arise when algorithms make decisions, process data, or interact with customers, rather than relying on broad definitions and circumstances.

What does it mean to “insure AI?”

Insuring AI through a Tech E&O policy means protecting your business against:

• Algorithmic errors that cause financial losses
• Discriminatory AI outputs that violate regulations
• Data breaches involving AI training datasets
• Professional liability for AI-powered services
• Regulatory investigations into AI practices
• Third-party claims arising from AI decisions

Why companies creating with AI need insurance

Unique risks for AI developers

Companies that build AI products or services face distinct liability exposures that many insurance policies often don’t address adequately.

Algorithm discrimination risks

One of the most significant exposures for AI developers involves algorithmic bias and discrimination. AI models trained on historical data can perpetuate or amplify existing biases, leading to discriminatory outcomes that violate employment, lending, or consumer protection laws. 

For example, an AI hiring platform might systematically screen out qualified candidates from certain demographic groups, resulting in costly discrimination lawsuits and regulatory investigations. Except, this isn’t an example. This happened to Amazon in 2018.

Similarly, AI-powered lending platforms have faced scrutiny for unfairly denying loans to protected classes, while healthcare AI systems may provide unequal treatment recommendations based on biased training data.

Professional liability exposures

AI development companies face substantial professional liability risks when their products or services fail to meet client expectations or cause financial harm. This includes AI consulting services that don’t deliver promised results, machine learning models that underperform in real-world applications, or AI integration projects that cause system failures at client organizations. 

When an AI recommendation engine provides faulty suggestions that cost a client millions in lost revenue, or when a predictive analytics platform fails to identify critical business risks, the resulting professional liability claims can be substantial.

This also actually occurred. This time, to Workday in the first half of 2025.

Intellectual property claims

The AI development process creates multiple intellectual property exposure points. Training AI models often involves processing vast amounts of data that may include copyrighted content, leading to infringement claims. Patent disputes over AI algorithms and methodologies are becoming increasingly common as the technology matures. Additionally, AI companies may face trade secret theft allegations when former employees join competitors, or trademark violations when AI systems generate content that infringes on existing marks.

To help you understand the scope of this issue, Wired has been tracking AI copyright infringement lawsuits in the US since December of 2024.

Regulatory investigation costs

As AI regulation intensifies globally, companies developing AI face increasing scrutiny from regulatory bodies. The Federal Trade Commission has ramped up investigations into AI marketing practices and algorithmic accountability via their Artificial Intelligence Compliance Plan. State-level agencies are developing AI-specific compliance requirements, while international regulators, particularly under the EU AI Act, are creating comprehensive oversight frameworks. These investigations can result in significant defense costs, fines, and operational disruptions, even when companies ultimately prevail.

Essential Coverage for AI Creators

Technology Errors & Omissions Insurance forms the foundation of protection for AI developers, covering professional liability claims arising from AI services that fail to meet expectations. This coverage protects against allegations of inadequate AI performance, errors in AI consulting and implementation, and failure to deliver promised AI capabilities.

AI Coverage That’s Built to Last

Embroker’s AI insurance coverage is clear, protects tech companies against real risks, and is built for the way businesses actually use AI.

Learn More

Product Liability Coverage becomes essential for companies selling AI software or embedding AI capabilities in physical products, protecting against claims that defective AI products caused financial losses, operational failures, or even physical harm to end users.

NOTE: Not just any policy will do. Artificial intelligence is still an emerging risk, and some insurance providers are struggling to keep pace with the constantly evolving landscape. Ensure that your policy specifically covers against known risks, and explicitly names them. Vague policy language may put you and your business at higher risk, especially as this space continues to grow.

Why companies using AI need insurance

Operational AI risks

Even companies that don’t develop AI internally face significant liability exposures when incorporating AI tools into their business operations. The rise of readily available AI platforms and services means that virtually any business can now leverage artificial intelligence, but this accessibility comes with often-overlooked risk considerations.

Third-party AI liability

When companies use external AI platforms or tools, they don’t necessarily transfer liability to the AI provider. If a business deploys a third-party AI hiring tool that systematically discriminates against certain candidates, the employer remains liable for the discriminatory outcomes, regardless of whether they developed the AI themselves. This is related to the recommendation engines we talked about earlier. 

Similarly, companies using AI-powered customer service platforms may face liability if the AI provides incorrect information that leads to customer financial losses, or if AI-driven pricing algorithms violate consumer protection regulations.

Ask Air Canada how their lawsuit is going, for example.

Data Privacy Exposures

The intersection of AI and data privacy creates complex liability scenarios that many businesses underestimate. AI tools often require access to sensitive customer information to function effectively, creating potential violations of privacy laws like GDPR, CCPA, or industry-specific regulations. When AI platforms inadvertently share data between customers or transfer information across borders without proper safeguards, the businesses using these tools may face regulatory fines and customer lawsuits. Additionally, AI systems that collect and analyze personal data for business insights must comply with evolving privacy regulations that many traditional policies don’t adequately address.

In 2024, LinkedIn was accused of using private conversations between users to train its AI algorithm. Clearly a violation of data privacy, resulting in a lawsuit from Premium users.

Employment Practices Risks

The use of AI in human resources and employee management has created an entirely new category of employment liability. Beyond hiring discrimination, AI tools used for performance evaluation may unfairly penalize certain groups of employees. Workplace surveillance AI that monitors employee productivity and behavior raises privacy concerns and potential wrongful termination claims. Automated scheduling algorithms that disproportionately affect workers with certain characteristics can lead to labor law violations.

This is incredibly similar to the Workday lawsuit we mentioned earlier but, clearly, the concerns don’t stop at the hiring process.

Coverage Needs for AI Users

Employment Practices Liability Insurance is critical for any organization, not only those using AI in HR processes. However, this coverage can protect against discrimination claims arising from AI hiring platforms, wrongful termination allegations when AI influences employment decisions, and privacy violations from AI-powered employee monitoring systems. However, this is never a guarantee, and policy holders should confirm these specific cases with their insurance provider before making any assumptions.

Cyber Liability Insurance may be enhanced to address AI-specific data risks, including breaches involving AI platforms that process customer information, regulatory violations when AI systems mishandle personal data, and the unique challenges of managing data across multiple AI service providers.

Once again, this is not something that every Cyber Liability Insurance provider will be able to offer. However, companies like Coalition are trying to keep pace with the industry by adding specific AI endorsements to their policies.

General Liability Enhancement may require specific endorsements to cover AI-related operational risks, such as customer service failures caused by AI chatbots providing incorrect information, operational mistakes driven by flawed AI recommendations, or reputational harm from public AI failures.

However, according to Hunton, Andrews, Kurth LLP, “General Liability policies broadly protect businesses from claims arising from business operations, products, or services. Where AI is deployed as part of the insured’s business operations, lawsuits arising from that deployment should be covered unless specifically excluded.”

NOTE: These policies may not have specific language to protect against AI misuse. Ensure that you are checking with your insurance provider that these coverages have the ability to cover AI-related risks as they pertain to employment practices, data privacy, general liability, and more.

The Future of Artificial Intelligence Insurance

Regulatory Developments

The regulatory landscape for artificial intelligence continues to evolve rapidly, creating new compliance requirements and liability exposures that insurance policies must address. The European Union’s AI Act represents the most comprehensive AI regulation to date, establishing risk categories for AI systems and imposing strict compliance obligations on AI developers and users. In the United States, state-level AI regulations are emerging across multiple jurisdictions, with requirements ranging from algorithmic auditing to bias testing and transparency reporting.

These regulatory developments are driving changes in artificial intelligence insurance as insurers adapt their policies to cover new types of investigations, compliance failures, and enforcement actions. Companies can expect to see more sophisticated regulatory coverage that addresses both current requirements and anticipated future regulations.

Coverage Evolution

The insurance industry is developing increasingly sophisticated approaches to AI risk management. Parametric AI insurance products are emerging that provide automatic payouts when specific AI system failures occur, eliminating the need for lengthy claims investigations. Real-time risk monitoring systems that use AI to monitor AI risks are becoming more prevalent, allowing for dynamic policy adjustments based on actual system performance.

Industry-specific AI insurance policies are being developed to address unique risks in sectors like healthcare, financial services, technology development and autonomous vehicles. These specialized policies provide more targeted coverage for sector-specific AI applications and regulatory requirements. Additionally, global AI coverage options are expanding to provide unified protection for multinational companies operating AI systems across multiple jurisdictions with varying regulatory frameworks.

Where to Get Artificial Intelligence Insurance

Choosing the Right Provider

Selecting an appropriate artificial intelligence insurance provider to address your AI risk exposure requires careful evaluation of several critical factors. 

1. AI expertise stands as perhaps the most important consideration—insurers must demonstrate deep understanding of AI technologies, risks, and regulatory requirements to provide meaningful coverage. 
2. The policy language itself must be explicit and comprehensive rather than vague or ambiguous, ensuring that AI-related claims receive proper coverage rather than being denied due to unclear terms.
3. Claims experience represents another crucial factor, as insurers with actual experience handling AI-related claims can provide more reliable coverage and faster resolution when issues arise. 
4. Financial strength remains fundamental, as AI-related claims may involve substantial amounts, requiring insurers with sufficient capital reserves and strong financial ratings.

Embroker: Specialized AI Insurance for Tech Companies

Embroker offers a comprehensive Technology Errors & Omissions policy that includes a strong endorsement for artificial intelligence. This endorsement is specifically designed for technology companies navigating the complex AI risk landscape. Our AI Insurance Endorsement provides comprehensive coverage within your Tech E&O policy, including: 

• AI discrimination protection that addresses bias issues
• Algorithm removal expense coverage
• AI-centric regulatory investigation defense for government inquiries
• Explicit AI professional services coverage that eliminates ambiguity around AI-related professional liability.

Our approach offers unique advantages through technologist-built AI definitions that evolve with advancing technology rather than remaining static. Our coverage is designed to expand protection rather than restrict it, addressing the full spectrum of AI risks without unnecessary limitations. We provide coverage specifically tailored for AI and fintech companies, along with a digital application process optimized for the fast-paced technology sector.

AI Coverage That’s Built to Last

Embroker’s AI insurance coverage is clear, protects tech companies against real risks, and is built for the way businesses actually use AI.

Learn More

Getting Started with AI Insurance

Assessment Steps:

1. Identify AI Exposures – Catalog all AI use in your business
2. Review Current Coverage – Understand existing policy gaps
3. Evaluate Risk Tolerance – Determine appropriate coverage limits
4. Compare Options – Get quotes from expert providers
5. Implement Coverage – Secure protection before you need it

Next Steps

Artificial intelligence insurance is no longer optional for companies serious about AI. Whether you’re developing cutting-edge AI products or simply using AI tools to improve operations, specialized coverage protects your business against evolving risks.Ready to protect your AI business? Learn more about Artificial Intelligence Insurance Coverage with Embroker in this article.

Today’s cloud-based policy administration systems (PAS) are designed to enable both P&C and Life insurers to manage policies through their entire lifecycle and are the foundation of carriers’ digital strategies. These types of platforms are a boon to carriers looking for ways to enhance their customer relationships and develop more effective offerings but many carriers aren’t leveraging the full potential of these systems.

Carriers know they need to adopt digital processes to stay competitive and that cloud-based technology can expedite that transformation. We’re seeing many of our clients implement PAS platforms to take the first steps towards more effective digital operations. However, while implementation brings its own challenges, the true challenge lies in driving value over the long-term and maximizing the platform’s capabilities to serve larger business goals.

The Benefits of a PAS Platform

Carriers often implement PAS platforms with the goal of modernizing their processes and becoming more agile in the market. However, many carriers lack a continuous delivery plan to ensure that they are truly realizing the benefits of the new platform such as product and feature flexibility, experience personalization, rating & pricing flexibility and acceleration through regulatory requirements.

Measuring the impact of a PAS implementation

To achieve success with Policy Administration System (PAS) platforms, it is essential for insurance carriers to establish methods for measuring the platform’s impact on their business. Considering recent inflation trends, carriers must determine the speed at which they can implement rating and pricing changes using the new PAS. This metric will also indicate how quickly they can develop and offer new products and features to their customers. Given that departments of insurance frequently raise objections to filings, the ability to rapidly make changes to insurance products will be a crucial measure of success. Carriers should also develop a continuous review loop to see how the platform performs over time. This will help them to identify areas where the platform can be improved and to make necessary changes. Effective measurement should be the basis for improvement. When it comes to seeing results from a PAS implementation, the key is to continuously review the efficacy of the solution and look for opportunities to improve within the performance data. A key outcome carriers must look at is whether they have been able to deliver innovation to their customers with the platform. Has the PAS solution enabled the business to effectively anticipate the needs of the market? Have new products been piloted and released on a continuous and timely basis?

Data Accuracy is crucial 

PAS platforms should help carriers measure whether their innovation is generating ROI and enable them to move quickly to iterate on products as needed. To do this, carriers need to make sure the data coming from the PAS platform is accurate and that problems with data accuracy aren’t negatively impacting claims or billing systems. They also need to consider whether they are fully leveraging the data they have. Ideally, carriers would be able to extract the data and use AI and data science to perform analysis and generate insights which are then fed back into the PAS platform so that users can engage in data-driven decision making. As an example, rates should be updated as quickly as possible in production with rate changes happening as fast as the pricing and actuarial teams provide feedback.

Optimizing your investment with post-implementation health checks

Setting up a recurring health check of the overall PAS product and the lines of business associated with it helps carriers ensure that there’s alignment with the original goals of the implementation. These health checks should inform new goals going forward.

Additionally, the health check needs to dive into the operating costs of customer service representatives and underwriters. The PAS platform has to create more opportunities for growth while reducing costs and boosting efficiency. Carriers can measure success by benchmarking team productivity before the solution was introduced and compare current efficacy against the projections made at the time of implementation.  Finally, carriers can zoom out and take a look at whether the solution has helped the team develop revenue-generating products. They should consider if the product teams have been using data: determining if rich data is readily available or if data is still siloed in disparate legacy systems. Product teams should be using data to inform their product strategies and a PAS solution should enable a more holistic view of customer data across the organization. If carriers find that data optimization is still an issue, they need to reprioritize encouraging adoption of data-driven processes or assess whether the platform itself is creating barriers to data accessibility.

If you’re looking for ways to get more out of your PAS investment, I would love to connect. Feel free to reach out to me here.

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Disclaimer: This content is provided for general information purposes and is not intended to be used in place of consultation with our professional advisors.

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Global insured losses from natural catastrophes reached $80 billion in the first six months of 2025 alone, making it the second-costliest first half on record since data collection began decades ago, according to reports by reinsurance giants Munich Re and Swiss Re.

Both reports called out the devastating wildfires that swept through Los Angeles County in January as the single most destructive event to date, with both firms estimating that these fires caused $40 billion in insured losses.

What makes these disasters particularly alarming is their timing and location. Both reports emphasized that the Los Angeles fires occurred during California’s normally wet winter season, when such massive blazes are typically unheard of. This seasonal shift represents a troubling new pattern, in which dangerous fire conditions persist year-round, rather than just during traditional fire season.

The reports also agree that severe thunderstorms across the American Midwest and South continued to cause billions in additional damage throughout spring, reinforcing how weather-related disasters are becoming both more frequent and more costly as communities expand into high-risk areas.

Swiss Re and Munich Re both identify the same underlying drivers making these disasters so expensive: More people are building homes and businesses in dangerous areas like wildfire-prone zones and tornado alleys, while climate change is making extreme weather events more intense and unpredictable.

The reports agree that this combination of increased development in risky locations and worsening weather conditions means that what happened in the first half of 2025 is likely just a preview of even costlier disasters to come, unless communities take serious steps to build more resilient infrastructure and avoid construction in the most hazardous areas.

Cat losses and replacement costs

Swiss Re emphasized the growing wildfire threat, pointing out that, before 2015, wildfires on average contributed around 1 percent of the total insured losses from all natural catastrophes worldwide.

“In the last 10 years, this has risen to 7 percent, the costliest periods being a two-year stretch of 2017‒18, and to a lesser extent 2020,” the report said.

Swiss Re also points to severe impact of post-pandemic construction cost inflation, noting that “construction costs rose by 35.64 percent from January 2020 to June 2025, directly impacting property claims costs.”  These higher costs to repair and replace property significantly increase the financial impact of each disaster.

“The best way to avoid losses is to implement effective preventive measures, such as more robust construction for buildings and infrastructure to better withstand natural disasters,” said Thomas Blunck, a member of Munich Re’s Board of Management. “Such precautions can help to maintain reasonable insurance premiums, even in high-risk areas. And most importantly: to reduce future exposure, new building development should not be allowed in high-risk areas.”

Swiss Re cautions that climate change is creating more volatile and unpredictable loss patterns, making catastrophe losses “more difficult to predict.” Together, these trends suggest the U.S. insurance market must prepare for sustained pressure on pricing and availability, particularly in high-risk coastal and wildland-urban interface regions.

Learn More:

Russia Quake Highlights Unpredictability of Natural Catastrophes

Texas: A Microcosm of U.S. Climate Perils

Triple-I Brief Highlights Wildfire Risk Complexity

BRIC Funding Loss Underscores Need for Collective Action on Climate Resilience

P&C Insurance Achieves Best Results Since 2013; Wildfire Losses, Tariffs Threaten 2025 Prospects

Data Granularity Key to Finding Less Risky Parcels in Wildfire Areas

California Finalizes Updated Modeling Rules, Clarifies Applicability Beyond Wildfire

2025 Tornadoes Highlight Convective Storm Losses

Severe Convective Storm Risks Reshape U.S. Property Insurance Market

Modern Building Codes Would Prevent Billions in Catastrophe Losses

[00:00:00] Paul Lucas: Hello everyone and welcome to the latest edition of Insurance Business TV as we delve into the A&H market with QBE North America. Now the company has released its 2025 Accident and Health Market Report which offers insights on current trends affecting self-funded healthcare plans. Key topics include medical stop-loss claims trends, growth in the specialty pharmacy market, and factors hindering a healthier society. Well, to discuss its findings and more, we welcome Tara Krauss, President of Accident and Health at QBE North America. Tara, welcome to IBTV.

[00:00:30] Tara Krauss: Oh, thanks for having me today.

[00:00:32] Paul Lucas: So to kick things off, Tara, let’s talk about medical stop-loss coverage. What makes it an important part of a self-funded employer’s benefits strategy?

[00:00:39] Tara Krauss: Thanks, Paul. I think that’s a really important question and one that sometimes gets overlooked in a self-funded plan. So self-insured plans really dominate the commercial market today. Over 65% of health plans are self-insured and actually upwards of 85% of mid to large employer groups. That’s 500 plus self-insured. It’s definitely the preferred option for employers seeking to control costs and have the ability to customize their plans. Stop loss is pretty common for a self-insured plan for a number of reasons, growing increasingly important with today’s current claims trends. Nearly all small to mid-market self-insured plans will have stop loss, but it’s becoming even more prevalent with the large group market. We’re seeing an increase in both frequency and severity of claims in recent years, making stop loss coverage really a wise choice to protect the plan assets. In fact, our claims trend study that we’ll probably get into a little bit today revealed that our million dollar claims have doubled in the last four years time. So it’s a really a great asset, a safety net for the self-insured plan. Current trends affecting self-funded healthcare plans.mp4

[00:01:46] Paul Lucas: Well, you brought me nearly to it there. Let’s talk a little bit about some of those key findings from this year’s report. What should brokers and employers be paying attention to?

[00:01:54] Tara Krauss: Good question. I think it’s important that they continue to explore cost-effective point solution options, plan enhancements to mitigate those current claims trends that we’ll talk about today. The importance of increasing prevalence of disease is something that we’ve been focusing a ton on. The proliferation of these $1 million claims post the ACA, specialty pharmaceuticals, and the number of new approvals each year that drive those chronic disease and some of those rare conditions that are out in the market now. Employers really need to educate themselves. And that’s where we can rely on our brokers to focus and educate the consumer.

[00:02:28] Paul Lucas: And of course, the report highlights rising claims costs tied to cancer, circulatory disease and premature births as well. So what’s driving those trends and what are the implications for benefit strategies and stop-loss coverage?

[00:02:40] Tara Krauss: There’s a number of things driving the trends, but I’d say for this question, I’d focus on cancer, circulatory, and some of those premature birth claims. And I can get into that a little bit. Cancer continues to be that kind of the elephant in the room year over year in the healthcare space. It’s the predominant driver of stop-loss claims on our book of business and many of my competitors. It drives nearly a third to a fourth of our full book of excess loss claims, regardless of spec deductible. Outside of root cause, the cost of these claims is largely driven by the treatment. These are really targeted and expensive treatments, not like what we had seen 20 to 30 years ago, where you had one diagnosis and one treatment plan. There are a multitude of treatment plans depending on the type of tumor, the staging of the tumor, the age of the individual, and what comorbidities they might have. Some of these targeted and expensive therapies include CAR T-cells, immunotherapy. Stem cell transplants that used to be maybe third or fourth line of defense are now moving up to a first or second line of defense in the treatment plan. These are cancers that might be getting treated more aggressively at earlier stages because of the advanced staging of an initial diagnosis. Certainly, we looked at and have continued to look at the impact of deferred care as a result of the pandemic. A lot of people stayed home. They weren’t getting a preventative care cancer. Had the opportunity to progress to a further stage, ultimately getting more costly treatments. Our book frequency, for example, we see about 21 neoplasm cancer-related claims for every 10,000 employees on a health plan. And the average of those claims is upwards of 375,000, roughly 365, to be exact. Circulatory claims is another big one. And something we did focus on a lot this year in our review. This is anything related to heart failure, AFib, valve disorders, pulmonary disease. These claims are largely driven by chronic disease, comorbidities, things like diabetes, obesity, hypertension. Healthcare-related costs to these conditions is expected to triple in the next 30 years. So there has to be a ton of focus in the healthcare space on these conditions. The frequency in our claims has risen about 60% post-COVID, you know, sedentary lifestyles. The American lifestyle has certainly contributed. And last, you had mentioned premature births. So we haven’t really seen an… increased incidence of premature births but we’ve really observed an increase in pre-term births that have congenital anomalies that increases the severity of the claim because there is earlier and more aggressive interventions with that type of premature birth. Current trends affecting self-funded healthcare plans.mp4 Current trends affecting self-funded healthcare plans.mp4

[00:05:24] Paul Lucas: Okay and the report also talks about the impact of poor societal health as well so can you share some more insights on that topic and how it might be impacting claims?

[00:05:32] Tara Krauss: Sure Paul. So reinsurers don’t tend to take too much look at what’s driving these claims, right? We’re reimbursing them. And we felt it was important to take a look at, really, what is driving it from a societal perspective, especially with the focus of the current administration. So the market is definitely seeing an increasing cancer diagnosis across the board, but specifically breast, colon, pancreas, lung, and younger age, more aggressive stage. A higher diagnosis rate in women, specifically younger women under 50, related to breast and thyroid. This is really less about genetics and more about environmental and lifestyle factors. Certainly better detections at play, genetic factors, and your life factor into your lifetime risk of cancer. But the trends are really pointing at environmental and lifestyle as being the driving factors of what’s causing these alarming trends. 90 to 95% of cancers are caused by what we consider like a modifiable factor that includes everything from tobacco use, alcohol intake, living a sedentary lifestyle, diet and obesity, with over 50% of our diet in the U.S. being processed and 85% of what’s on the shelves having some questionable ingredients that could be contributing to chronic disease, inflammation in the body, our food supply, infectious agents, and certainly even the healthiest of crops being sprayed with pesticides that have some alarming chemicals that are getting attention currently in the US. One study I read suggests that the incidence of early onset cancer is expected to increase 50% globally in the coming years. So it is something that we as a society and those in the healthcare space should really be calling attention to and focusing on. Current trends affecting self-funded healthcare plans.mp4 Current trends affecting self-funded healthcare plans.mp4

[00:07:12] Paul Lucas: QBE, of course, recently expanded its offerings to Taft-Hartley and multi-employer health plans. So what makes this market unique and how is QBE addressing the needs?

[00:07:22] Tara Krauss: Sure. We’re really excited to be in this space and have this new offering. We’ve got a great team. The labor unions are really uniquely positioned to handle the management of claims. Due to both those relationships, they’re a very relationship-driven cohort and they have strong alignment with their key constituents, those that are leveraging the plan. 95% of members on a union plan have access to health care as opposed to 65% in the general commercial market. And those individuals are seven times more likely to seek regular health care visits with their primary care. Obviously, seeking health care visits, you get the screening and the prevention and likely to get earlier detection on anything you have going on or direction on what you might need to mitigate to prevent lifetime risks. Unions tend to also implement, from a plan control basis, better utilization management. They implement things like reference based pricing and centers of excellence to manage their costs. They’re really well managed plans. They have strong governance. Speaking from a stop loss insurance partner, we see higher close ratios on the business we quote, lower claims and an incredibly loyal customer base. So once you have a union customer, they tend to stick with you over the long term. Current trends affecting self-funded healthcare plans.mp4

[00:08:34] Paul Lucas: And given what the report highlights, what advice would you give to brokers when it comes to helping clients plan for the next year?

 

[00:08:40] Tara Krauss: From a stop loss perspective, I’d ask that they just continue to share their knowledge with the broader customer base on educating them on the lifestyle factors stuff that we talked about, because we tend to kind of sit back. And I think that’s something we all need to start leaning into and to really impact change. A solid PBM management plan. It all starts with that, have a judicious focus on a transparent vendor in that space. There’s a real lack of transparency with some of the big players. So focusing on reducing waste, how are rebates handled? Side of care controls are in place. As far as the reinsurance renewals, educating the employer groups on what leverage trend is and how important it is, even slight modifications, increases to the employers, what we call their specific deductible year over year helps to mitigate their renewal increases. Partnering certainly with a financially sound carrier that shows up at time of claim, really, it only takes one bad claim experience to lose a long-term client. So credibility, A-rated, responsive and service-led team, I think is critically important. Current trends affecting self-funded healthcare plans.mp4

[00:09:44] Paul Lucas: Yeah, great advice. And obviously a lot to gauge from the report as well. If anyone wants to know more, Tara, where can they find it?

[00:09:51] Tara Krauss: Sure. They can go to the QBE website, qbe.com and search for the A&H page. And we’ve got a copy of the report there.

[00:09:58] Paul Lucas: Excellent. And once you’ve finished there, make sure you come back to us too. We’ll be waiting to see you next time right here on Insurance Business TV. Current trends affecting self-funded healthcare plans.mp4

Life insurance stands on the cusp of a new chapter in reinvention. Until now, insurers have been gradually moving forward with wide-scale digital transformation. But with the impacts of AI, including generative AI, change is coming fast. We’re in a vibrant new year, and life insurers are starting to accelerate and implement their reinvention strategies. This is the time to be bold.

These underwriting predictions offer insights into how carriers can take action to truly become digital this year.

Generative AI brings next-level customer centricity

Generative AI-empowered customer centricity will close the gap even further between carriers and customers for more personalized product offerings and services. This trend will continue to reach new levels in the year ahead as new technologies enable deeper connections between customers, advisors and carriers. Recent Accenture research found that today’s customers feel the need for protection in areas beyond what traditional insurance offers. For example, the next generation of insurance customers say they feel less protected for mental health. To address these concerns and more, guidance from an advisor is key. However, insurers have been unable to provide that level of customer experience—until now.

Generative AI extends the care and knowledge of hyper-personalized solutions to more people. Digital agents, diverse chat functionalities, ask-me-anything capabilities and the evolution of enterprise-level generative AI solutions are swiftly bridging existing gaps within the customer-advisor-carrier framework in the industry—and this is just in the beginning stages.

In last year’s predictions, I highlighted how new levels of AI and automation capabilities would enhance real-time underwriting decisions and enable a faster digital buying experience. We believe this trend will also continue this year as more and more life insurers begin their implementation strategies.

It’s worth monitoring the development of generative AI underwriting tools in 2023 that work to enhance the efficiency and accuracy of underwriting and risk management as well as streamline processes and generate valuable insights. Often referred to as Underwriter Co-pilot at Accenture, this technology will play an even stronger role in 2024 as it continues to be fine-tuned with advances in LLMs.

I want to be clear that new technologies will not replace advisors. These technologies are necessary as insurers continue to face skilled labor shortages across the insurance value chain. The solutions that are more personal and customized work to address a different type of skills shortage. With the retirement crisis in insurance still on the horizon, Human + Machine collaboration will become even more crucial as we look for new ways to support employees across the core business functions of both underwriting and claims.

To share a concrete and recent industry implementation, Accenture helped a large A&H insurer to automate its claims process by using advanced voice AI, AI-powered human assist capabilities, a digital virtual assistant and proactive, multi-day journeys. The journeys involved two-way messaging tied to an event that helped complete a customer’s request in the same channel for a smoother experience while the AI-powered assistant worked to provide real-time AI-based guidance to agents during customer conversations.

Digitalization will pick up speed to start the reinvention journey

Life insurers may tout digital underwriting processes and aspirations, but many are still stuck in analog operations. Carriers have been paper-based companies with paper-based processes, and this continues to be the foundation of business as today’s paper takes the form of PDFs, Excels and Adobe. But in 2024, true digitalization and the transition to real-time data will be more achievable than ever if carriers have the imagination and leadership to start the reinvention journey.

The reinvention will be to truly make life insurance digital end-to-end—transitioning everything in your business to real-time data. From improving your claims core and engagement system to enhancing the underwriter’s workflow, once information is data, there are so many ways to rewrite processes. And the benefits are there, including expense savings, uptake and many more. While I do not believe this will be the year for completing full reinvention, it is the year to start your journey by focusing on pieces of your business to reinvent.

I would recommend taking inspiration from one of today’s industry-transforming leaders. Ping An launched a pilot digital solution to enhance agent planning, increase sales performance and improve its life insurance business. This pilot resulted in a decrease of development time by 30% and a service re-use rate of 25%.

The time is now to move from experimentation to implementation

To start any journey requires action. Several life insurers will take important steps in their digital journeys this year by going beyond proof of concept to implement the transformative tools and mature technologies currently available.

Entering the implementation phase will drive business transformation, impacting everything from the underwriting experience and the claims experience to the customer experience and beyond. As a growing technology area in insurance, intelligent ingestion (the ability to digitally ingest data) offers incredible advantages as a starting point for this phase.

As a final thought for this blog post, another noteworthy development to keep an eye on is the emergence of comprehensive beneficiary care services as a distinguishing value proposition for the selling of new products—a topic I’ll explore more in my next blog. Stay tuned.

Let’s talk about implementing initiatives for your reinvention journey.

Additionally, check out Accenture’s new network of generative AI studios.

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In celebration of International Women’s Day, we are delighted to be part of a panel of extraordinary women leaders for this special edition of Insurance News Analysis. We discuss the strides being made toward gender equality and the work that remains. 

So, what is being done to recruit, retain and promote women in the insurance industry? The research shows that attracting women is not a problem, but there is a struggle in growing that talent into leadership roles . Our guest Gunjali Rana, Assistant Vice President of Diversity, Equity & Inclusion at CNA, one of the Insurance Business 5-Star DE&I winners, adds that while the disparity in pay between men and women is certainly an issue, there are other gaps to consider. 

Insurance companies are now establishing programs dedicated to increasing representation of women and diverse groups in the industry. Trina Bowser, the Accenture member of the Black Insurance Industry Collective (BIIC) Leadership Council, discusses how the BIIC partners with companies to create programs that promote mentorship and sponsorship. 

According to the Accenture Future of Work study, a staggering 70% of the global workforce carries caretaking responsibilities for children, parents and other loved ones. Our panel shares tactics they have leveraged that may help women in the workforce remain in their roles and grow their careers. 

We also touch on the responsibility of the insurance industry when it comes to inclusive insurance, which our colleague Heather Sullivan talked about recently on her blog. 

Accenture’s IWD theme this year is “Be Without Limits.” We wrap the session by sharing inspirational women our panelists believe have lived without limits. 

Happy International Women’s Day! 

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Disclaimer: This content is provided for general information purposes and is not intended to be used in place of consultation with our professional advisors.

Disclaimer: This document refers to marks owned by third parties. All such third-party marks are the property of their respective owners. No sponsorship, endorsement or approval of this content by the owners of such marks is intended, expressed or implied.

Amid a summer full of deadly fires and storm-related flooding, the Trump Administration appears to be rolling back some of the spending cuts imposed upon the National Weather Service (NWS) by the Department of Government Efficiency (DOGE).

The National Oceanic and Atmospheric Administration (NOAA) – of which NWS is a part – announced at an internal all-hands meeting earlier this month that they will hire 450 meteorologists, hydrologists, and radar technicians. CNN reported the announcement, citing an unnamed NOAA official. In jointly timed press releases, Congressmen Mike Flood and Eric Sorensen (D-Ill.) and Mike Flood (R-Neb.) acknowledged the planned hirings.

While the decision is welcome news, both congressmen continued to urge their colleagues to pass their bipartisan Weather Workforce Improvement Act to ensure these positions will remain permanent and not be subject to any future reductions. 

“For months, Congressman Flood and I have been fighting to get NOAA and NWS employees the support they need in the face of cuts to staff and funding,” Sorenson said. “Hundreds of unfilled positions have caused NWS offices across the country to cancel weather balloon launches, forgo overnight staffing, and force remaining meteorologists to overwork themselves.”

“For decades the National Weather Service has helped keep our communities safe with accurate and timely forecasts,” said Flood, adding that the NOAA announcement “sends a message that they’re focused on strengthening the NWS for years to come.”  

NOAA and FEMA cuts raised fears

It’s not just the NOAA and NWS cuts that have raised concerns. On April 4, 2025, the Federal Emergency Management Agency (FEMA) announced that it would be ending its Building Resilient Infrastructure and Communities (BRIC) program and cancel all BRIC applications from fiscal years 2020-2023. Congress established BRIC through the Disaster Recovery Reform Act of 2018 to ensure a stable funding source to support mitigation projects annually. The program has allocated more than $5 billion for investment in mitigation projects to alleviate human suffering and avoid economic losses from floods, wildfires, and other disasters.

At the time, Chad Berginnis, executive director of the Association of State Floodplain Managers (ASFPM), called the decision to terminate BRIC “beyond reckless.”

 “Although ASFPM has had some qualms about how FEMA’s BRIC program was implemented, it was still a cornerstone of our nation’s hazard mitigation strategy, and the agency has worked to make improvements each year,” Berginnis said. “Eliminating it entirely — mid-award cycle, no less — defies common sense.”

Resilience investment is key to long-term insurance availability and affordability.  Average insured catastrophe losses have been on the rise for decades, reflecting a combination of climate-related factors and demographic trends as more people have moved into harm’s way.

Efforts have been made to save BRIC, and a U.S. District Judge in Boston recently granted a preliminary injunction sought by 20 Democrat-led states while their lawsuit over the funding moves ahead. Judge Richard G. Stearns ruled the Trump Administration cannot reallocate $4 billion meant to help communities protect against natural disasters.

In his ruling, Stearns said he was not convinced Congress had given FEMA any discretion to redirect the funds. The states had also shown that the “balance of hardship and public interest” was in their favor.

“There is an inherent public interest in ensuring that the government follows the law, and the potential hardship accruing to the States from the funds being repurposed is great,” Stearns wrote. “The BRIC program is designed to protect against natural disasters and save lives.”

Learn More

2025 Cat Losses to Date Are 2nd-Costliest Since Records Have Been Kept

Russia Quake Highlights Unpredictability of Natural Catastrophes

JIF 2025: Federal Cuts Imperil Resilience Efforts

Louisiana Senator Seeks Resumption of Resilience Investment Program

Texas: A Microcosm of U.S. Climate Perils

BRIC Funding Loss Underscores Need for Collective Action on Climate Resilience

Weather Balloons’ Role in Readiness, Resilience

ClimateTech Connect Confronts Climate Peril From Washington Stage

The legal profession has undergone a dramatic transformation, with 2025 marking a pivotal year for how law firms approach technology, risk, and business strategy.

In light of AI and smart technology’s explosion, legal professionals have emerged with newfound confidence and strategic clarity. This shift represents more than incremental change—it signals a major shift in how successful law firms operate in an era of rapid transformation.

In this month’s newsletter, we’ll explore the key findings from our newly released 2025 Legal Industry Risk Index, based on insights from 245 full-time legal professionals across the United States. From the dramatic surge in AI adoption to the complete reordering of internal risk priorities, these findings reveal an industry that has found its stride with emerging technologies, and is confidently charting a bold course forward.

The data tells a story of strategic evolution, where technological adoption, comprehensive risk management, and protective planning are working together, not competing for attention.

Let’s dive into the findings.

What’s going on?

AI adoption skyrockets in legal industry — Embroker 2025 Legal Risk Index | Legal professionals have officially gotten their “AI sea legs,” with reported usage surging from just 22% in 2024 to 80% in 2025. This, and more data on risk management strategies and insurance coverage, reveals an industry in confident transition.

Reputational risks can overshadow ransom in cyberattacks, Aon says — Insurance Journal | According to Aon, reputational risk can cause shareholder value to fall by an average of 27%, and reputational risks are nontransferable. Read more in Aon’s Global 2025 Cyber Risk Report.

Lawyers hit turning point on AI — Above the Law | The legal industry’s relationship with risk has fundamentally changed, with 37% of professionals now viewing risk as a growth opportunity—more than double the 18% who held this view just one year prior. This confidence shift is enabling bolder business strategies and technological innovation.

The risk transformation: How legal professionals reordered priorities

The legal industry’s approach to risk management has undergone a big transformation, with new challenges emerging while traditional concerns have normalized.

Key shifts 

• Internal risk priorities have shifted dramatically from financial pressures to reputational and employment-related concerns 
• External threats now center on disruptive technology adaptation and professional liability rather than economic volatility 
• Inflation concerns dropped from 52% to 28% as a primary worry, indicating normalization of economic uncertainty

The new risk landscape

Internal challenges taking center stage: 

• Reputational risks from public controversies tie for #1 concern at 47% 
• Employment-related claims match reputational risks as top priority 
• Struggles managing remote or hybrid workforce operations rank as a significant challenge at 39%

External threats evolving rapidly: 

• Disruptive technology adaptation leads external risks at 53% 
• Professional liability threats rank as #2 external concern at 51% 
• Cybersecurity breaches maintain significance at 40% of responses

Industry insight: The shift from purely financial concerns to reputational and operational challenges suggests legal professionals are operating from a more stable economic foundation, allowing them to focus on strategic growth and risk management rather than survival-mode financial planning.

The insurance awakening: Strategic protection enables innovation

Legal professionals have dramatically transformed their approach to insurance coverage, viewing protection as a strategic enabler rather than a necessary expense.

Key shifts

• 45% of legal professionals are upgrading their insurance policies, up from just 14% in 2024 
• 77% now express confidence that their coverage addresses their greatest business risks 
• Cyber insurance has shifted from optional to essential, with uncertainty about coverage dropping significantly

Strategic coverage approach for law firms

Proactive policy enhancement: 

• Request twice-yearly comprehensive coverage reviews to identify gaps in protection 
• Evaluate policy limits against current business operations and growth plans 
• Build out comprehensive guidelines for AI-use, remote work, and digital operations

Confidence-building measures: 

• Verify that coverage keeps pace with technological adoption and new service offerings 
• Ensure employment practices liability coverage addresses hybrid workforce challenges 
• Review cyber insurance limits in light of increasing threats

Implementation strategy: 

• Create centralized documentation systems for all insurance policies and endorsements 
• Establish regular coverage and guideline review schedules aligned with business evolution 
• Evaluate insurance providers’ knowledge of the legal sector, risks, and specific challenges

Risk management insight: The 77% confidence rate in current coverage suggests legal professionals are taking a more strategic approach to insurance purchasing, viewing comprehensive protection as the foundation that enables them to pursue growth opportunities and technological innovation with greater security.

The future of legal risk management: Strategic integration

The legal industry’s risk management evolution points toward a more sophisticated integration of technology adoption, strategic planning, and comprehensive protection.

Emerging trends: 

• AI governance frameworks are becoming standard practice for managing professional liability exposure 
• Risk assessment processes increasingly incorporate reputational and employment-related factors 
• Insurance purchasing decisions align more closely with strategic business planning cycles

Strategic considerations: While technology continues to reshape legal practice, the fundamental principle remains unchanged: successful firms understand that embracing innovation and protecting against risk aren’t competing priorities, but complementary strategies that work together to enable sustainable growth and competitive advantage.

What’s new from Embroker?

Upcoming events, stories, and more

Legal Risk Index driving industry conversations

Our comprehensive survey of 245 legal professionals is generating significant discussion across legal publications, including Law.com, Solicitors Journal, Law360, Above the Law, and more.

AI in Legal Practice Webinar Now Available On-Demand

Our recent webinar with Reminger Law Firm and Everest is now available on demand. Watch Rafael McLaughlin and Rob West break down the AI tools law firms are using, the risks to watch out for, and real cases of malpractice.

AI in Legal Practice, 2025: A deep dive

Based on the findings from our 2025 Legal Industry Risk Index Report, we break down the numbers, talk tactics, and offer best practices for managing AI for lawyers in our most recent blog.

Like what you’re reading? Check out the Embroker Blog for more insights on legal industry risk management and strategic insurance planning.

Generative AI (GenAI) has the potential to transform the insurance industry by providing underwriters with valuable insights in the areas of 1) risk controls, 2) building & location details and 3) insured operations. This technology can help underwriters identify more value in the submission process and make better quality, more profitable underwriting decisions. Increased rating accuracy from CAT modeling means better, more accurate pricing and reduced premium leakage. In this post, we will explore the opportunity areas, GenAI capability, and potential impact of using GenAI in the insurance industry.

 

1) Risk control insights zone in on material data

Generative AI allows risk control analysis insights to be highlighted to show loss prevention measures in place as well as the effectiveness of those controls for reducing loss potential. These are critical to informed underwriting decisions and can address areas that are consistently missed or pain points for underwriters in data gathering. Currently when it comes to submission screening, underwriters are unable to review every submission due to high volume and disparate sources. Generative AI allows them to analyze the completeness and quality across all submissions at scale. This means that they move from a limited ability to compare information against similar risks to a scenario where they have comparative insights on risks by evaluating submissions against UW Guidelines and current book of business.

What generative AI can do:

• Generate a comprehensive narrative of the overall risk and its alignment to carriers’ appetite and book
• Flagging, sourcing and identifying missing material data required
• Managing the lineage for the data that has been updated
• Enriching from auxiliary sources TPAs/external data (e.g., publicly listed products/services for insured’s operations)
• Validating submission data against those additional sources (e.g., geospatial data for validation of vegetation management/proximity to building & roof construction materials) 

Synthesizing a submission package with third party data in this way allows it to be presented in a meaningful, easy-to-consume way that ultimately aids decision-making. These can all enable faster, improved pricing and risk mitigation recommendations. Augmenting the information received from the broker with third party data also eliminates the long lag times caused by today’s back and forth between underwriters and brokers. This can be happening immediately to every submission concurrently, prioritizing within seconds across the entire portfolio. What an underwriter might do over the course of a week could be done instantaneously and consistently while making informed, structured recommendations. The underwriter will immediately know control gaps based on submission details and where significant deficiencies / gaps may exist that could impact loss potential and technical pricing.  Of course, these must then be considered in concert with each insured’s individual risk-taking appetite. These improvements ultimately create the ability to write more risks without excessive premiums; to say yes when you might otherwise have said no.

 

2) Building & Location details insights aid in risk exposure accuracy

Let’s take the example of a restaurant chain with multiple properties that our insurance carrier is underwriting to illustrate building detail insights. This restaurant chain is in a CAT-prone region such as Tampa, Florida. How could these insights be used to supplement the submission to ensure the underwriter had the full picture to accurately predict the risk exposure associated with this location? The high-risk hazards for Tampa, according to the FEMA’s National Risk Index, are hurricanes, lightning, and tornadoes.  In this instance, the insurance carrier had applied a medium risk level to the restaurant due to:

• a past safety inspection failure
• lack of hurricane protection units
• a potential link between a past maintenance failure and a loss event

which all increased the risk.

On the other hand, in preparation for these hazards, the restaurant had implemented several mitigation measures:

• mandatory hurricane training for every employee
• metal storm shutters on every window
• secured outdoor items such as furniture, signage, and other loose items that could become projectiles in high winds

These were all added to the submission indicating that they had the necessary response measures in place to decrease the risk.

Whereas building detail insights expose what is truly being insured, location detail insights show the context in which the building operates. Risk control analysis from building appraisals and safety inspection reports uncover insights showing which locations are the top loss driving locations, whether past losses were a result of covered peril or control deficiency, and adequacy of the control systems in place. In the case of the restaurant chain for example, it did not have its own hurricane protection units but according to the detailed geo-location data, the building is located approximately 3 miles away from the closest fire station. What this really means is that in terms of context gathering, underwriters move from being unable to triangulate from high volume of information and documents submitted to being able to drill down for additional context on insights within seconds. This in turn allows underwriters to identify and follow up on leakage drivers from insights and context gathering to recommend risk mitigation actions more effectively.

 

3) Operations insights help provide recommendations for additional risk controls

Insured operations details synthesize information from the broker submission, financial statements and information on which aspects are not included in Acord forms / applications by the broker.  The hazard grades of each location associated with the insured’s operations and the predominant and secondary SIC codes would also be provided. From this, immediate visibility into loss history and top loss driving locations compared with total exposure will be enabled.  

If we take the example of our restaurant chain again, it could be attributed a ‘high’ risk value rather than the aforementioned ‘medium’ due to the fact that the location has potential risks from e.g. catering delivery operations. By analyzing the operation exposure, this is how we identify that high risk in catering :

The maximum occupancy is high at 1000 persons, and it is located in a shopping complex. The number of claims over the last 10 years and the average claim amount could also indicate a higher risk for accidents, property damage, and liability issues. Although some risk controls may have been implemented such as OSHA compliant training, security guards, hurricane and fire drill response trainings every 6 months, there may be  further controls needed such as specific risk controls for catering operations and fire safety measures for the outdoor open fire pizza furnace.  

This supplementary information is invaluable in calculating the real risk exposure and attributing the correct risk level to the customer’s situation.

 

Benefits to generative AI beyond more profitable underwriting decisions

As well as aiding in more profitable underwriting decisions, these insights supply additional value as they teach new underwriters (in significantly reduced time) to understand the data / guidelines and risk insights.  They improve analytics / rating accuracy by pulling all complete, accurate submission data into CAT Models for each risk and they reduce significant churn between actuary /pricing / underwriting on risk information.  

 

Please see below a recap summary of the potential impact of Gen AI in underwriting:

 

In our recent AI for everyone perspective, we talk about how generative AI will transform work and reinvent business. These are just 3 ways that insurance underwriters can gain insights from generative AI. Watch this space to see how generative AI will transform the insurance industry as a whole in the coming decade. 

If you’d like to discuss in more detail, please reach out to me here. 

 

Disclaimer: This content is provided for general information purposes and is not intended to be used in place of consultation with our professional advisors. Copyright© 2024 Accenture. All rights reserved. Accenture and its logo are registered trademarks of Accenture.