Insurtech Armilla says it can underwrite AI exposure without years of claims data
By James Thaler
(The Insurer) - Armilla AI has launched a standalone insurance policy designed to cover artificial intelligence risks, saying it can accurately underwrite AI exposure without having to rely on years of historical claims data.
The startup, which was founded by AI veterans with 15 years' experience in the field, launched its first insurance product in April, offering third-party liability coverage for AI-related risks.
"We have the ability to look into that risk, at the source of that risk, and we can project out the probability of that model failing, which is the source of that risk," Karthik Ramakrishnan, Founder and CEO of Armilla, told The Insurer TV at the Insurtech Insights USA conference in New York.
Ramakrishnan said AI risks are currently "silently covered" by technology errors and omissions policies, which do not adequately address the unique exposures created by AI systems.
"You could get sued because your AI model discriminated against someone. You could get sued because your AI model failed and cost financial damages to someone," he added.
Armilla's approach differs from traditional insurance underwriting, which typically requires years of claims data to price risk accurately.
"We've deployed hundreds of solutions. We've tested a lot of these solutions, and we have a ton of data that tells us, depending on different domains, use cases, applications, what could be the probability of that failure, and what could be the consequential losses as a result," Ramakrishnan said.
Deloitte estimates the AI insurance market could reach $5 billion before 2032 and Armilla is targeting small to medium businesses up to the larger mid-market segment, saying it has attracted particular interest from highly regulated industries including financial services, healthcare, and manufacturing.
Watch the full interview with Armilla co-founder and CEO Karthik Ramakrishnan hear more on:
How Armilla says it can effectively underwrite AI exposure without years of claims data
The need for a rethink of existing industry coverages to account for AI silent exposure
Ramakrishnan’s predictions on how the segment for AI insurance will scale
Details on Armilla’s appetite ranging from SME to the large account segment
And more…
