Spanish risk managers urge caution over AI

After the hype over the past couple of years, Spanish companies are now assessing the real opportunities created by new artificial intelligence technologies, as well as the risks they pose. Spanish risk managers believe that AI will have a significant impact on the insurance market but remain doubtful to what extent it will be relevant for commercial lines. “AI will have a strong impact on companies. What will it be and how are companies going to use it? Everybody is still evaluating that,” said Daniel San Millán, president of Spanish risk management association Igrea. “On the one hand, things are moving very fast. We are all aware that AI will affect our companies and our business models, as well as those of our competition and our business partners, but it remains unclear how. So we need to be very careful about how we use the technology.” “I am a member of committees where we talk half the time about the opportunities and half the time about the risks of AI,” he continued. “The former are pushed forward by the IT and business development teams. I emphasise the risks that we will face and that the company is assuming, which must be understood and controlled. I am not there to stop the process but I am watchful that AI is not implemented in a way that is too fast and uncontrolled. Otherwise, we will face unexpected surprises.” So companies should not wait for regulators to reign in AI technologies and must implement their own measures to manage the risk, continued San Millán, who is also the corporate risk manager at construction group Ferrovial. “The problem is that regulation goes behind the risks, and that is even more true in the case of AI,” he said. “My main worry regards the mass use of AI without controls, and what will be its consequences at the level of the final users, and how they will affect our companies. Those are risks that we are still unable to identify and to quantify.” Lourdes Freiria, general director of risk and insurance at construction group Grupo San José, said AI is a growing reality for corporates. She said the topic demands the approach laid out in the ISO 31000 risk management standard, which emphasises managing both the threats and opportunities brought about by risks. “AI’s huge potential to improve efficiency, data and the optimisation of processes makes it inevitable that it will be gradually integrated into our activities,” she said. “However, in a business such as construction, the human element will never be replaced. AI’s input must be focused on helping and improving processes.” “There is no doubt that the threats must be mitigated via robust security systems that prevent AI from becoming a weapon, if it is vulnerable to attacks,” she pointed out. AI systems have been embraced by the insurance market, especially in retail-oriented sectors like car and health insurance. It is not clear, however, what impact the technology will have on the commercial and specialty side of the market. The risk manager at a financial institution in Spain, who asked not to be named, said he has heard of underwriters developing AI-driven applications but has not come across any significant example of practical use in the commercial insurance space. “For insurers, AI is also an opportunity, and they should develop the technology to improve their services,” he said. “There are opportunities to improve management, transparency, efficiency and the availability of relevant and segmented information to make it more useful for final users. It can also improve consistency and reliability in underwriting discipline, among other things.” “Maybe AI can help the market to cover new risks?” he asked. But San Millán sees the trust-based, relationship-grounded corporate segment as a hard nut for AI to crack. “I have my doubts about how AI will be deployed by the large risks market in a deep sense, not only on pure mechanical tasks. It remains a business based on talent and on the knowledge of individuals,” he said.

Spanish risk managers urge caution over AI

AI’s threats and opportunities still need to be properly assessed

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