UPDATE – May 2025: This article summarizes key insights from the Geneva Association’s report on AI and insurance regulation. Since the report’s release, new rules have taken shape. The EU AI Act—formally adopted in March 2024—classifies many insurance AI applications as “high-risk,” introducing upcoming compliance obligations. BABL AI now offers independent audits and regulatory guidance tailored for insurers aligning with the EU AI Act, ISO/IEC 42001, and other emerging frameworks.

ORIGINAL NEWS STORY:

Geneva Association Analyzes Global AI Regulation in Insurance

While the European Union (EU) goes over the final details of the EU AI Act and the United States begins laying the groundwork for an AI roadmap, the only global association of insurance companies is weighing in on regulation of AI in insurance. The Geneva Association (GA) released a report that analyzes the regulatory developments for AI applications as well as their impact on insurance companies around the world.

The report starts out by stating that while AI is transforming the industry by offering expanded risk pooling, reduced costs, risk prevention and mitigation, and improved customer service, it does also post a lot of risks like bias, discrimination, exclusion, lack of transparency and data privacy issues.

EU AI Act Compliance and High-Risk AI Regulation in Insurance

For the report, the GA looked at several insurance markets where AI regulation is being looked at and/or is happening. Those markets include Australia, China, the EU, Japan, Singapore, the United Kingdom and the U.S. The report notes that the EU has the most ambitious legislation when it comes to AI regulation and bias audits. The report says that under the EU AI Act, insurance utilizes AI applications that are deemed as high risk. Those applications, which are deemed high risk, are used by insurance companies for underwriting. In the insurance field, underwriting involves assessing and clarifying risks, and pricing those risks. For instance, AI could be used to assess your risks and overall cost for life and health insurance.

Outside of that, the report says that most of what is stated in the EU AI Act most likely encompasses all of the analytical methods already used by insurers. As for the U.S., despite several guidelines issued by federal entities and several state laws, the report believes that regulation of AI in the insurance industry is already mainly shaped by existing anti-discrimination laws at the state and federal level.

Calls for Insurance-Specific Regulation 

Industry experts interviewed for the report expressed concern that general-purpose AI rules may stifle innovation. Because the insurance sector has unique needs and applications, they argue that it requires tailored regulatory approaches.

The Geneva Association offers the following recommendations for policymakers:

• Clearly define AI in a regulatory context

• Update or adapt existing regulations where appropriate

• Use principles-based (rather than prescriptive) approaches

• Consider sector-specific characteristics in insurance

• Emphasize customer outcomes and data governance

• Support international collaboration on standards and compliance

Need Help as Insurers Face Growing Compliance Obligations?

As AI regulation deepens across regions and sectors, the Geneva Association’s call for insurance-specific guidance remains especially timely. BABL AI now provides regulatory readiness assessments, audit services, and governance strategies for insurers navigating the EU AI Act, ISO standards, and national-level frameworks.