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KYND flags hidden AI accumulation risk for insurers
KYND says 77% of organizations use ChatGPT, raising the odds that AI exposures are missed at underwriting and build across multiple policies.
KYND, a cyber risk intelligence provider, warned that insurers may be accumulating hidden AI-related exposure across their portfolios as companies adopt artificial intelligence tools without consistently disclosing that use to carriers. In a new white paper, The Wild West of AI Risk, the firm said the industry’s near term problem is getting clearer visibility into where and how AI is being used, rather than focusing only on future policy wording changes.
KYND said underwriting effectiveness depends on understanding clients’ technology usage, but the pace of AI adoption can lead some organizations to integrate AI before discussing it with insurers. That gap, it warned, can create unidentified exposure that builds across multiple policies, contributing to wider accumulation risk.
The company noted that AI related claims are already appearing, and warned that insurers could face an issue similar to silent cyber, where cyber risks accumulated within policies before insurers fully recognized their scope. KYND also pointed to emerging AI related disputes, including allegations involving unreliable outputs, copyright concerns, and claims of bias.
KYND added that insurers face uncertainty because historical claims data on AI risks remains limited, making it harder to assess potential long term impact and price those risks effectively. It cited the widespread use of AI tools, saying 77% of organizations now use ChatGPT.