Artificial intelligence is set to play a major role in shaping the insurance industry’s future. But many in the sector remain uncertain about how insurance will handle and price the risks that come with AI. Andrea Ward, senior vice president of casualty at CRC Insurance Services, says the industry is underestimating the potential risks AI brings. Still, she is hopeful about AI’s long-term benefits.
Ward points out that AI is changing so fast that there are many unknowns. She believes insurance companies will struggle to use AI effectively until they figure out exactly how claims related to AI will be covered. One clear shift she’s noticed is in excess and surplus (E&S) insurance, where companies whose core products rely on AI are seeking specialized coverage.
To meet this demand, Ward and her team helped create a London-based insurance facility tailored specifically for AI-focused businesses. This setup offers coverage and policy wording designed for companies that depend on machine learning. “We’ve developed a facility to properly insure these kinds of risks,” Ward said.
The challenge isn’t just about higher risks but also new kinds of liability. AI can create outputs and experiences that might lead to claims in ways the industry hasn’t dealt with before. Ward explained that it’s still unclear how standard insurance forms, like commercial general liability (CGL), will apply to these AI-related claims.
Despite these challenges, Ward sees AI as a helpful tool. It can speed up research, provide better benchmarks, and offer more resources for insurance work. But she warns that AI might also bring unexpected issues, such as making high court verdict data more accessible to the public, which could affect claims expectations. Because of this, she recommends using AI to assist human judgment, not replace it.
“AI should be part of what we do, but it’s not the whole answer,” Ward said. “Experience and good judgment still matter a lot.” She encourages brokers and insurers to keep an eye on policy language around AI, as discussions about how standard insurance forms respond to AI outputs will be important in the coming years. Facilities like the one she helped create will likely become more common as insurers get more familiar with AI risks.
For Ward, relationships and human connection remain key in insurance. Some parts of the job, like handling claims with empathy and sharing past experiences, can’t be replaced by technology. In her view, people will keep insurance grounded while AI acts as a powerful tool to improve the process. When used well, AI can help reduce uncertainty in underwriting by providing clear, consistent data, leaving room for experienced professionals to interpret and decide.
Andrea Ward will moderate a panel on AI at the Women in Insurance Summit Los Angeles on October 30. This event is now in its eighth year and offers insurance professionals a chance to hear from leading speakers and explore practical ways to use AI in their work. The summit also focuses on career growth and leadership skills, promoting a more inclusive and resilient insurance industry. Those interested can find more information and register at the summit’s website.