The Federation of European Risk Management Association launched the first thought paper on the implications of artificial intelligence (AI) for risk management at its 2019 Risk Management Forum in Berlin.
This paper aims to guide risk managers on applying AI from a basic understanding to developing their own strategy on the implementation of AI. It includes an action guide and a template for risk managers to develop their own AI risk management roadmap.
In terms of ERM, risk managers will want to consider how AI can be best used:
- How can risk management frameworks integrate AI, especially as a source of new risks across the organisations?
- Can we process more data to mitigate losses?
- How can we use AI in the claims process?
- What processes will we create and what will be provided by brokers, insurers and re-insurance companies?
The report states that to perform well, AI needs data of a certain quantity and quality. The very first question to consider is therefore about the organisation’s strategy for managing its corporate data. As such, solving the data issue and implementing AI in business is a challenging project that impacts many corporate functions, including the risk manager.
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