As artificial intelligence (AI) continues to evolve in the P&C insurance industry, navigating regulatory trends has become increasingly critical to ensuring compliance, maintaining consumer trust, and fostering responsible innovation. In a recent AAIS webinar, industry experts discussed the evolving role of AI in the insurance sector, focusing on its regulatory trends and best practices for responsible adoption. Chris Aufenthie, Director of Regulatory Filings at AAIS, moderated the discussion with insights from Anthony Habayeb, Co-Founder and CEO of Monitaur, and Mary Block, Director of Insurance Regulation at the Vermont Department of Financial Regulation. Together, they explored key topics including trends in AI adoption, practical steps to align with the NAIC AI Bulletin, and strategies to ensure transparency and explainability for regulators and consumers.

Regulation plays an outsized role in the development of the auto insurance sector. Since the beginning of the pandemic, we have seen an even higher than usual impact from wild fluctuations in rates, claims, premiums, and consumer reimbursements, to activities impacting the industry itself.

Risks are continually evolving and emerging, requiring updates to insurance policies in order for carriers to keep pace with market need. Whether you’re a regulator or an underwriter, reviewing new policy language in a timely fashion can be a challenge, and can negatively impact speed-to-market.

We’re at an inflection point with blockchain technology. A greater community of interest has developed beyond cryptocurrency with the realization that blockchain can solve all types of problems. Insurance regulators nationwide are starting to create “sandboxes,” essentially incubators where new technologies and innovations can be developed and tested, exempt from prohibitive regulations, until a proper regulatory framework can be created.

Cannabis is a multi-billion-dollar market that continues to be underserved by the insurance industry. While the majority of states and the District of Columbia have legalized cannabis in one form or another, less than 30 insurers are participating in the marketplace nationwide. As the number of states moving toward legalization rises, the number of cannabis related businesses (CRBs) multiplies, and public acceptance of legalization increases, it is imperative that the insurance industry understand and normalize cannabis coverage.  

While the U.S. economy slowly returns to normal following the COVID-19 pandemic, the insurance industry continues to grapple with business interruption claims, court battles and the future of pandemic-related insurance. In Part II of our two-part Advisory Report, Nicole Milos, Assistant Counsel at AAIS, explains the systemic risk global pandemics pose to the insurance industry and how we’re leveraging data gathered during the pandemic to meet customer demand for future pandemic-type coverage.