Artificial Intelligence algorithms can operate not as expected causing to write policies insurance companies should not write or price those policies inappropriately or overpay claims that are made by customers. This business story explores how to prevent proprietary artificial intelligence algorithms do not lead to unintentional bias and discrimination.
Innovative companies like Lemonade utilizes the data gathered from the insurance application process to determine whether or not to write a particular policy and, if so, how to price that particular policy. Similarly, they use proprietary artificial intelligence algorithms to process many of claims. The data that they gather through interactions with customers is evaluated and curated by proprietary artificial intelligence algorithms.
The continuous development, maintenance and operation of deep-learned backend data analytics engine is expensive and complex, and may involve unforeseen difficulties including material performance problems, undetected defects or errors, for example, with new capabilities incorporating artificial intelligence.
This processing may encounter technical obstacles, and it is possible that they may discover additional problems that prevent proprietary algorithms from operating properly.