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• Climate change will affect populations in different ways, depending on their geography, demographics and health status.
• Insurers need to identify which impacts will have the biggest effects on their business.
• New approaches such as microinsurance, parametric risk transfer solutions and digital technology could help insurers to close the protection gap.

Less than a year since its launch, ChatGPT seems to be an omni-presence in our lives as it grabs headlines and redefines some tasks and workflows in offices, universities and homes.

In case you missed it, ChatGPT is a chatbot that was developed by OpenAI and released publicly on 30 November 2022. ‘GPT’ stands for generative pre-trained transformer.

Essentially, you ask the chatbot a question, and it uses artificial intelligence (AI) to generate a unique response in text, images or video — drawing on language patterns it accesses from the pre-2021 internet.

Human feedback — voting responses up or down — improves ChatGPT’s performance over time, so that future responses will be more accurate and relevant. 

Users can ask ChatGPT for factual information, such as ‘What is the average annual rainfall in Auckland?’, right through to asking it to write a 5,000-word university essay on platypus habitats, requesting a graph of a company’s 10-year growth or getting it to write a short, professional email to a client, seeking additional information to complete a project. 

The focus for industry leaders and legal and compliance teams, however, now needs to shift from incredulity about the power of OpenAI’s famous chatbot to some critical questions. 

What business risks and opportunities do ChatGPT and other generative AI tools — ones that create new content in response to a prompt — present? How should insurers respond strategically and legally to this technology? How can they protect the data and intellectual property of their customers?

Jono Soo, head of cyber specialty at Marsh New Zealand, says insurance industry leaders need to learn the nuances of the technology and be mindful of any associated risks. 
“The key is to understand how [ChatGPT] is intersecting with current areas of coverage,” he says. 

“In some respects, it’s just another advancement of existing AI technology, so there doesn’t need to be a knee-jerk reaction from markets at this stage.”

In its Global Risks Report 2023, Marsh states that advancements in AI, quantum computing and biotechnology will create risks and “enable the misuse of personal information through legitimate legal mechanisms, weakening individual digital sovereignty and the right to privacy, even in well-regulated, democratic regimes”.

 Soo says any concerns about generative AI technology are clearly not just an issue for the insurance industry. “Governments need to be across this as well, and societies in general.

We really need to find some frameworks to quickly regulate the development and use of this technology and start putting some guard rails around it.”

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