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Emerging risks of artificial intelligence span all sectors

Emerging risks of artificial intelligence span all sectors

Artificial intelligence promises to make sweeping changes across society, but a report released Thursday by Allianz Global Corporate & Specialty S.E. warns that disruption will accompany that change.

The report, The Rise of Artificial Intelligence: Future Outlook and Emerging Risks, says AI comes with both potential and risks in such diverse areas as economic, political, mobility, health care, defense and environmental.

AI, the report said, “spans applications in almost every industry and has been predicted to increase corporate profitability in 16 industries across 12 economies by an average of 38% by 2035.”

The Allianz Risk Barometer 2018 rated the impact of AI and other forms of new technology as the seventh top business risk, ahead of political risk and climate change. Companies face new liability scenarios and challenges as responsibility shifts from human to machine, Allianz Global Corporate & Specialty said in the report.

AI is predicted to perform existing jobs more efficiently than human workers and compensate for a decline in the workforce, especially due to population aging. However, the report warns that this potential substitution of many low- and middle-income jobs could bring extensive unemployment.

The report cited a 2017 study by the London-based construction firm Mace Group Ltd. that said 600,000 of the current 2.2 million jobs in the industry could be automated by 2040.

“Such scenarios will require new ways of determining liabilities and mitigating risks of social security,” the report said.

The report said autonomous driving is probably the most well-known upcoming AI application. A woman was killed Sunday in Tempe, Arizona, when she was struck by an autonomous vehicle belonging to the San Francisco-based ridesharing company Uber Technologies Inc. 

Current automobile insurance policies are based on the principle of strict liability, where the car owner is liable for both individual driving mistakes and defects of the vehicle due to maintenance, the report said.

Under this principle, the report said, insurers pay for damages to other road users independently from the cause of the accident. Insurers are then responsible for approaching car manufacturers and requesting refunds of advanced payments when accidents occur due to design or manufacturing defects.

With autonomous driving, the ratio of cases in which insurers will need to get compensation from car manufacturers and AI software providers will drastically increase, because the human user will often be out of the loop.

The report said that new liability models resembling product liability, where manufacturers take over liability for product defects, will probably be adopted.



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