Health sector can be hardest hit by adverse effects of artificial intelligence

The health and pharmaceuticals sector is set to be hardest hit by the adverse effects of artificial intelligence (AI) over the next decade, according to a report by Swiss Re Institute.

The study looks at emerging AI risks across ten industries, exploring the probability and severity of various AI-related loss incidents due to data bias, cyberattacks, algorithmic and performance-related risks, among others.

Christoph Nabholz, Chief Research & Sustainability Officer at Swiss Re

While IT services are currently the most affected by AI risks as a pioneer in this area, this is set to change as the use of technology becomes more widespread across all industries, such as in health and mobility

Christoph Nabholz, Chief Research & Sustainability Officer at Swiss Re

Insurance companies are therefore starting to introduce specific cover for AI performance failures – one of the biggest risks for all industries.

Health sector can be hardest hit by adverse effects of artificial intelligence

As the health industry increasingly adopts AI technology for tasks such as administration, patient monitoring, diagnosis, and drug development, associated risks are escalating, with potentially severe or fatal consequences (see How Artificial Intelligence AI is Modernizing the HealthCare Industry?).

Flawed or biased AI algorithms, for example, may lead to misdiagnoses, resulting in serious illness or death.

Over the next eight to ten years, the sectors most vulnerable to the adverse effects of AI technology, aside from health, are mobility and transport, and energy and utilities, which rank second and third respectively.

The mobility and transport sector faces significant AI risks, particularly with the implementation of AI-powered connected and automated driving in diverse urban environments.

The energy sector is also expected to heavily integrate AI, driven by the net-zero transition, which demands electrification and the development of smart grids.

Risk rankings across industries

Risk rankings across industries
Source: Swiss Re
Risk rankings across industries
Source: Swiss Re

The role of the insurance industry is to support our clients manage AI-related risks, in part with new risk protection products and partly through our existing lines of business. Providing AI risk solutions is a significant opportunity for the industry.

Insurance companies are already starting to introduce specific cover for AI performance failures – one of the biggest risks for all industries.

Pravina Ladva, Group Chief Digital & Technology Officer at Swiss Re

The benefits of AI are significant for a broad range of industries, but there are also risks that can lead to potential vulnerabilities

Pravina Ladva, Group Chief Digital & Technology Officer at Swiss Re

Given its role as a shock absorber, the re/insurance industry has an important role to play in addressing AI-related risks and helping build the digital trust needed to harness the full potential of such emerging technologies.

Nataly Kramer   by Nataly Kramer