Insurance in the AI Era: How Relm Addresses Web3, Crypto and More
New technologies bring fresh challenges to insurance providers, especially in pricing risk accurately. To create effective solutions, insurers study relevant regulations and look at similar industries. They also need a clear grasp of the technologies involved.
Relm, a provider focused on emerging risks, recently introduced three AI insurance products tailored to specific use cases. Claire Davey, Relm’s Head of Product and Emerging Risk, emphasizes that insuring new sectors starts with a thorough understanding of the technology’s details.
Designing Insurance for Emerging Sectors
Gaining this knowledge often means attending university seminars and engaging with investors to hear their concerns. Insurers analyze regulations alongside best practices and business expectations to develop products that protect consumers while complying with laws.
The insurance industry collaborates to grasp new technologies. Davey explains, “Various groups are working to understand emerging risks. We must track where these efforts stand in the market and with regulators.”
She adds, “Research and development involves looking at the technology’s use cases and regulations, as well as how the insurance industry is responding collectively.”
Relm anticipated the EU AI Act early on, which offered a foundation similar to GDPR. However, the regulatory landscape in the U.S. remains uncertain. Federal AI legislation was halted in 2024, returning the focus to state-level rules and existing laws applied in new ways, such as workplace discrimination and HR audits.
Challenges for Insurers
Without clear regulations, especially in the U.S., insurers must perform deeper underwriting compared to the EU’s more defined framework. Key concerns include bias, transparency, and confidentiality.
Insurers assess risks related to penalties if companies misuse AI. This includes reviewing governance structures that regulate AI use, training data selection, and controls to prevent bias.
Intellectual property (IP) has become a hot topic since generative AI emerged. Large language models that create text or images raise questions about potential plagiarism and IP ownership.
Davey notes, “There’s growing case law on IP issues, addressing whether AI-created content can have copyrights assigned and how infringement is handled.”
Confidentiality is critical, especially with AI applications like facial recognition in sensitive sectors such as banking and law. Strong controls must protect confidential information.
Web3 and Crypto: Signs of Regulatory Clarity
Like AI, Web3 faces regulatory uncertainty, with varying stances on cryptocurrency legality worldwide. Some regions are still catching up.
Davey observes, “Since President Trump’s return, crypto risks have lessened, improving stability and lowering default probabilities among exchanges.”
She adds that decentralized technologies are now better understood by insurers, attracting more capital and options for clients.
Combining Technologies Under One Insurance Line
Many businesses operate across multiple tech areas such as Web3, fintech, and AI, making it tricky to define which insurance coverage applies.
Davey explains, “A fintech may offer both technology and financial services, exposing it to cyber and crime risks. Losses could trigger multiple coverages.”
Insurers must offer solutions that prevent gaps in claims and meet the needs of innovative firms.
Security and Startups
Companies in emerging fields often fall into two groups: those prioritizing strict regulations and security early, and those launching minimum viable products first, addressing security later.
Security rose in importance after executives lost jobs due to poor procedures. For startups juggling many challenges, security is a complex task.
Davey appreciates this entrepreneurial spirit and says insurers like Relm aim to partner with startups to help them mature their risk and governance functions as they scale.
“It is a process,” she concludes.
For insurance professionals seeking to deepen their knowledge on AI and emerging technologies, exploring specialized courses can be valuable. Complete AI Training offers a variety of resources on AI courses that cover relevant topics in this evolving landscape.