The AI in Business Podcast
Model Development Best Practices for Insurance - with Mark McLaughlin of IBM
Mar 4, 2025
Join Mark McLaughlin, Director of Insurance at IBM, as he dives into the transformative role of AI in the insurance industry. He discusses the critical challenges insurers face, particularly model bias and the importance of data governance. Mark emphasizes the need for diverse perspectives in AI development to drive equitable outcomes. Discover how a mix of on-premise and cloud strategies is enhancing efficiency and security, enabling insurers to shift from reactive to proactive risk management.
19:12
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Quick takeaways
- Insurance companies must prioritize robust data governance frameworks to mitigate risks associated with model bias and ensure compliance with regulatory standards.
- A hybrid approach to AI and cloud integration allows insurers to optimize operations, enhance innovation, and maintain security by utilizing multiple models and environments.
Deep dives
Challenges of Model Bias in Insurance
The insurance industry is currently grappling with significant challenges related to model bias, which can lead to severe legal and social repercussions. Many insurance companies find themselves at risk of unintentional bias creeping into their processes, primarily resulting from the use of flawed training data. The speaker emphasizes the importance of ensuring the integrity of data used to train AI models, advocating for practices such as discarding biased data and maintaining transparency regarding data sources. As regulatory standards, like the EU's DORA and AI Acts, become more stringent, insurers are urged to implement robust data governance frameworks to mitigate risks associated with model bias.
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