The world seems to be moving faster, with new technologies being introduced in quick succession. A few of these stand out in creating new risks to the public: artificial intelligence, electric vehicles, and solar panels. Because these inventions are so new and fragile in their earliest models, they’re susceptible to external threats, including cyber attacks, physical damage, and the effects of user error. However, these three technologies also present opportunities for independent insurance agents.
Artificial Intelligence
Artificial Intelligence (AI) has become increasingly prevalent in business communications, reaching a level of authenticity in tone that blurs the line between AI-generated content and human-written copy. In this way, AI can help businesses and individuals save time and write higher-quality texts. However, cybercriminals can also exploit AI to send fraudulent communications and get access to sensitive data.
AI Increases Cyber Risks
AI-based systems tend to require large amounts of data to function well, raising concerns about the privacy and security of personal and business information, including personal and financial data. This scenario presents opportunities for cybercriminals, opening avenues for identity theft and other malicious activities.
Cybercriminals can also harness AI to develop more sophisticated attacks. Adversarial machine learning involves manipulating AI systems by introducing subtle changes to input data, such as images or text, to outsmart AI algorithms and evade detection by security systems.
Consequently, this situation emphasizes the importance of cybersecurity insurance and identity theft insurance, presenting an opportunity to the insurance industry to address the rising demand for better protection against cyber threats.
AI Increases Property & Casualty Risks
AI-driven autonomous vehicles or devices, such as self-driving cars and drones, raise concerns about safety and liability. System malfunctions, software bugs, and sensor failures in these systems could lead to accidents, injuries, or even fatalities. This could lead to a need for increased insurance coverage for vehicle owners, manufacturers, and operators.
In the case of autonomous vehicles, liability for accidents may shift from human drivers to manufacturers, software developers, and technology suppliers. Insurers may need to reassess liability risks and coverage requirements for autonomous vehicle manufacturers and suppliers, including software errors, design defects, and failure to warn consumers of system limitations or risks.
Insurers would do well to collaborate with stakeholders, including regulators, manufacturers, technology providers, and consumers, to address emerging risks. They have an opportunity to develop appropriate insurance products, while promoting responsible deployment and use of autonomous transportation technologies.
Electric Vehicles
EVs Increase Auto Risks
According to a report by RMI, by 2030, over two-thirds of cars on U.S. roads will be electric vehicles (EVs). While EVs are generally considered safe, there are concerns about the risk of fire or thermal runaway in lithium-ion batteries, especially in instances of high-speed collisions or during the charging process.
Electric vehicles can also cost more to repair and replace. For that reason, EV owners would be wise to invest in coverages beyond regular auto insurance, such as new car replacement insurance and original car replacement insurance. Depending on the situation, gap insurance may also be a good idea. Because of the increased costs, policyholders may be more likely to bundle with their homeowners insurance.
Insurers also have the opportunity to provide tailored insurance products designed specifically for EV owners. These products can provide coverage for risks like battery degradation, damage to charging infrastructure, and specialized repair and maintenance needs. Insurers can also partner with roadside assistance providers to offer specialized services like mobile charging units, battery replacements, and towing assistance.
Insurers can use telematics and data analytics to more accurately assess the risk profile of EV drivers. Factors such as driving habits, charging routines, and battery condition can be taken into account when determining premium rates and coverage levels.
Solar Panels
Solar panels offer a variety of advantages to the individual and the world as a whole, including reduced electricity expenses and environmental sustainability. However, they also present certain risks to the public.
Solar Panels Increase Property Owner Risks
While rare, solar panel systems can pose a fire risk due to faulty wiring, improper installation, or manufacturing defects. Improper installation or maintenance of solar panels can lead to structural damage to buildings. Water leaks, roof penetrations, or structural stress caused by the weight of solar panels can compromise the integrity of the building and lead to costly repairs.
Solar panel installations may increase liability exposure for property owners, particularly in cases where third parties (e.g., contractors, installers) are involved in the installation or maintenance process. Liability risks may include property damage, personal injury, or legal disputes.
Insurers have the opportunity to offer customized coverage for solar panel systems, providing protection against potential risks like fire damage, performance degradation, and liability concerns. Insurers can also provide coverage for the installation and maintenance of the panels. This can help shield property owners against risks like contractor errors, property damage, and worker injuries.
Final Thoughts
Overall, while these technologies present risks to the public, they also create opportunities for the insurance industry to develop innovative products and value-added services to mitigate those risks. By addressing the specific needs and concerns of these technology owners and users, insurers can capitalize on the growing market for these technologies and those yet to come.