Risk managers must take lead on AI: Panelists

SAN DIEGO — Artificial intelligence will not change the risk a company faces, only the amount, so risk managers should be proactive in assessing how the technology aligns with an organization’s risk management strategy, industry experts said Monday.

“AI and machine learning are the great innovation risk, and we need to get in front of it,” Alliant Insurance Services Inc. Senior Vice President CJ Dietzman, who is based in Charlotte, North Carolina, said during a session at Riskworld, the Risk & Insurance Management Society Inc.’s annual conference.

One of the benefits of AI is that it can accelerate data processing, making some jobs easier, said Robert Horn, an Alliant first vice president based in New York.

Lillian Russell, chief privacy officer of Los Angeles County, agreed, adding that AI can be used to find data within data and modernize and enhance functions.

“The technology is here, the question is how do we use it and infuse it into various lines of business,” she said.

To manage the risk posed by using AI, risk managers must understand how the technology is being used and engage with the right stakeholders in an organization, Ms. Russell said.

Risk managers must also be aware of the kind of data being provided to third-party vendors and how it is being used, because liability cannot be outsourced to vendors, said David Finz, an Alliant vice president based in New York.

Mr. Horn added that it is critical to review controls, policies and procedures for contractors retained to provide services involving AI.

While there are benefits to AI for businesses, the technology is also being used in an adversarial way by hackers, who are using large language models to deploy sophisticated attacks, he said, adding that many companies overestimate their readiness for such an event.