Swiss Re's group chief economist Jerome Jean Haegeli warned on July 13, 2026 that artificial intelligence is creating new categories of risk for insurers - challenges that go beyond the technology's well-documented benefits in pricing and claims. Speaking to CNBC's Squawk Box Asia, Haegeli said the industry must urgently update its risk frameworks to account for AI's unique failure modes.
Model opacity and bias
Haegeli pointed to the growing use of machine learning in underwriting and loss adjustment. These models can embed hidden biases from training data, leading to decisions that are difficult to explain to regulators or customers. "You may not know why the model denied a claim or priced a policy a certain way," he said. That lack of transparency, he added, exposes carriers to litigation and reputational damage.
Systemic concentration
Another concern is the risk of industry-wide correlation. If multiple insurers adopt similar AI tools from a handful of vendors, their portfolios could become vulnerable to the same model failures. Haegeli described a scenario where a common algorithmic flaw triggers simultaneous losses across many firms - a systemic shock that traditional diversification would not catch.
Liability gaps and regulatory lag
The legal framework has not kept pace. Haegeli said it remains unclear who bears responsibility when an AI system's error causes harm - the insurer, the software provider, or the data supplier. Until courts and lawmakers provide clarity, he warned, insurers face an accumulation of contingent liabilities that are difficult to price or reserve against.
Why this matters for insurance professionals
Haegeli's message is that AI risk is not a future problem - it is already embedded in today's operations. Underwriters, claims managers, and risk officers need to build competence in model validation, bias testing, and AI governance. For those looking to close that knowledge gap, dedicated resources on AI for Insurance offer structured guidance on the technical and regulatory dimensions now shaping the market.
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