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.