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Ensuring compliance: How the insurance sector can mitigate risks and guarantee ethical AI

Source: Finance Derivative

Luke Dash, CEO of ISMS.online

Artificial Intelligence (AI) is having a huge impact on nearly every industry, and the insurance and insurtech sectors are no different.   

According to the McKinsey Global Institute, generative AI has the potential to add between $2.6 trillion and $4.4 trillion to global corporate profits annually. Meanwhile, an additional study shows that AI can improve employee productivity by as much as 66%. 

These statistics speak volumes, which is why global insurers – and insurtechs – are now allocating significant resources to implement AI technology. According to the KPMG CEO outlook and Global Tech Report, insurers are increasingly embracing emerging technologies, and AI is considered to be one of the most important emerging technologies.

The implementation of AI in insurance

As companies that use innovative technologies to revolutionise how insurance products and services are developed, delivered, and managed, many insurtechs are now using AI to enhance customer service, perform risk assessments, and make product recommendations.

AI-powered chatbots and virtual assistants are used to provide instant, 24/7 customer support, improving response times and customer satisfaction. Additionally, AI can be used to analyse customer data to offer personalised product recommendations and dynamic pricing models, ensuring customers receive tailored coverage options and fair premiums.

For insurance companies and larger enterprises, AI can improve risk assessment and underwriting by analysing large datasets to identify patterns and predict risks more accurately. It also enhances fraud detection by spotting anomalies and patterns that humans might miss. Automated claims processing and damage assessment using AI speed up these processes, reduce errors and ensure timely payments.

Furthermore, AI provides valuable customer insights, helping insurers develop better products and proactive engagement strategies, enhancing customer retention and loyalty.

Similarly, AI can support insurtechs and insurance companies by automating and streamlining onboarding and training. It can identify individual skill gaps and create customised learning paths, making training more effective.

Beyond onboarding and training, AI can be used to improve overall operational efficiency and HR management. AI systems can continuously monitor employee performance, provide real-time feedback, and suggest personalised development plans. In HR, AI can aid recruitment by screening resumes and conducting initial assessments while monitoring employee engagement to improve workplace satisfaction. Other AI applications include optimising internal processes, managing resources effectively, and assessing operational risks. If implemented effectively, these applications could collectively lead to a more efficient, productive, and compliant organisation.

AI: The risks and ethical considerations

Using AI in this way raises ethical considerations for customers and employees in this sector. According to KPMG’s 2023 CEO Outlook Survey, 57% of business leaders expressed concerns about the moral challenges posed by AI implementation.  And despite AI’s exponential opportunities, organisations face increasing risks that should not be ignored.

For example, insurance companies and insurtechs must guarantee that customer data is collected, stored, and used in compliance with privacy regulations and that AI models used for pricing, underwriting, and claims processing are regularly audited for bias. Customers should also be provided with clear explanations of how AI-driven decisions are made.

From an employee perspective, companies must safeguard employee data, ensure that AI models used for talent management and performance evaluation prevent bias and discrimination, and provide transparency and human oversight in critical decisions.

To mitigate risks and ensure ethical AI usage, insurtechs and insurance companies should develop ethical AI guidelines. They should also regularly audit AI models, provide clear information to customers and employees, ensure human oversight, foster a culture of responsible AI practices, collaborate with regulators and industry peers, and continuously monitor the impact of AI systems on customers and employees.

However, ethical considerations are not the only ones that need attention. The insurance industry also faces significant cybercrime and data storage risks, particularly concerning GDPR compliance. These companies store vast amounts of sensitive customer data, making them attractive targets for cybercriminals. Risks include data breaches, ransomware attacks, and adversarial manipulations of AI systems.

To mitigate these threats, insurtechs and insurance companies must implement robust cybersecurity measures such as advanced encryption, multi-factor authentication, regular security audits, and AI-driven threat detection systems. Ensuring compliance with data protection regulations is crucial to avoid hefty fines and legal actions, which require stringent data handling practices, clear customer consent protocols, and thorough audits of third-party providers.  In a recent Allianz survey on how GenAI will impact the insurance industry, nearly half (48%) of respondents believe strict regulation is necessary to mitigate GenAI risks.  

So how can companies ensure they follow this regulation and manage these risks?

Leveraging key guidance frameworks

Adopting ISO 42001 and ISO 27001 standards can help insurance companies and insurtechs effectively manage AI usage and associated risks.

ISO 42001 provides guidelines for the governance and management of AI systems, addressing risk management, transparency, accountability, and ethical considerations. By following this standard, companies can establish a structured approach to identifying and mitigating AI-specific risks, ensuring transparency in decision-making processes, preventing bias and discrimination, and fostering a culture of responsible AI usage.

Complementing ISO 42001, ISO 27001 focuses on information security management, helping insurtechs and insurance companies to protect sensitive data in AI systems. Aligning with ISO 27001 enables them to implement robust security controls, comply with data protection regulations, assess and treat information security risks, and establish incident response plans.

By leveraging both standards, companies can take a comprehensive approach to managing AI risks and demonstrate their commitment to responsible AI practices, building trust among customers and stakeholders. However, insurtechs and insurance companies should tailor these standards to their specific needs, assess unique risks and expectations, and continuously improve their AI governance and information security processes.

Looking ahead: Embracing new technology and compliance

Looking ahead, the sophistication of cyberattacks is expected to increase, and regulatory environments will likely become stricter.

Insurtechs and insurance companies must invest in advanced cybersecurity technologies and continuously update their compliance strategies to stay ahead. There will also be a greater focus on AI ethics and fairness, driven by public and regulatory scrutiny, requiring the adoption of ethical AI frameworks and regular audits for bias.

Furthermore, advancements in privacy-preserving technologies, such as homomorphic encryption and differential privacy, will become more prevalent, and organisations should integrate these into their data processing workflows to enhance privacy and security.

Additionally, as AI ethics and data protection regulations tighten, non-compliance may lead to higher legal penalties, fines, and erosion of customer trust. Prioritising compliance becomes essential to protect both an organisation’s operations – and its reputation.

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Business

Driving UK business growth with AI reskilling, even during economic uncertainty

Alexia Pedersen, SVP International at O’Reilly

Amid ongoing economic challenges, UK businesses are grappling with salary stagnation and limited hiring. Employees, eager to advance their careers, are turning to digital reskilling as a pathway forward. Our latest research found that almost four in five (79%) UK employers have seen staff request digital upskilling opportunities over the last twelve months to strengthen their career prospects, particularly in roles linked to emerging technologies like AI and machine learning (ML).

Our platform has witnessed a surge in demand for learning resources on AI programming (66%), data analysis (59%), and operational AI/ML (54%) learning materials. We’ve also seen an uptick in demand for general AI literacy as IT teams encounter the hallucinations generative AI tools can exhibit.

However, given the accelerated integration of generative AI in most enterprises, the need for general AI literacy has extended beyond IT teams. In fact, 60% of enterprises are expected to have adopted generative AI in some form by the end of this year. Yet, while most business leaders agree their workforces need to be reskilled in GenAI, only 10% of workers are currently trained in GenAI tools. Now, non-technical employees are now seeking reskilling opportunities in AI and ML, cybersecurity, data analysis and programming.

This shift reflects widespread recognition of how emerging technologies can redefine roles and unlock new opportunities. So, how can employers ensure that every employee – not just IT – develops the skills to navigate and leverage AI and other digital tools?

Cultivating a culture of continuous learning

The integration of digital technologies requires more than just adopting the latest tools; it demands a skilled workforce committed to long-term innovation and growth. Businesses deploying AI must prepare every employee to effectively use these tools. Here, a continuous learning approach will ensure that digital transformation benefits the organisation at every level, driving resilience and adaptability within an evolving tech landscape.

Embedding learning in daily workflows, encouraging curiosity, and supporting tailored development initiatives can help achieve this goal. Cross-functional collaboration and knowledge-sharing can help to break down silos, allowing diverse perspectives to be shared amongst teams.

To foster a culture of continuous learning, people teams should emphasise to management the importance of “re-recruiting” to highlight the value of continuously investing in and engaging with talent as consciously as during the hiring process. The best results stem from having an executive sponsor who leads by example, championing learning at all levels. At the same time, employees should feel empowered to take ownership of their own growth, creating a culture where development is an ongoing, shared responsibility between individuals and the organisation.

Joining a company is only the beginning, and sustaining a valuable relationship depends on both the organisation’s support and the employee’s commitment to their own continuous development. To thrive, employees must actively seek out skill-building opportunities and leverage the learning resources available to them. Doing so will help employees remain agile within an evolving technological landscape, while also enhancing their own productivity and contributing to overall organisational success.

Real-time learning

For employees seeking opportunities for personal growth, to bridge the gap between learning and day-to-day responsibilities, employers can harness the ‘in the flow of work’ approach to provide staff with real-time access to quality learning content.

This concept was coined by Josh Bersin to describe a paradigm in which employees learn something new, quickly apply it and return to their work in progress. It’s different from traditional learning approaches like attending a seminar or conference. These learning formats are effective, but many employees simply don’t have the time to devote to them or they prefer to learn at a time that suits them best.  

Instead, it entails providing employees with tools that allow them to quickly find contextually relevant answers to their questions at a time that suits their schedule. Companies can offer ‘in the flow of work’ learning opportunities via an L&D partner to tailor materials to an individual’s unique learning style and objectives.  

This is particularly important not only for young talent who are new to the workforce but also for existing employees who are proactively seeking opportunities to develop their skills and advance their careers. In turn, this approach to workplace learning will increase employee engagement and productivity, fostering innovation and growth that improves the bottom line.

Preparing for the future

As businesses face a rapidly evolving landscape, a continuous learning strategy focused on digital reskilling and upskilling can help them remain competitive. It empowers employees to take charge of their personal growth, fostering a resilient workforce prepared for tomorrow’s challenges.

For companies navigating hiring freezes or budget constraints, prioritising AI literacy and skills development amongst their employees in critical areas such as cybersecurity, cloud, and data analysis can help drive productivity and innovation while ensuring that organisations remain agile during times of technological change. Above all, supporting reskilling today will develop the foundations for a thriving, adaptable workforce ready to face tomorrow’s challenges.

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Freeze-Drying: A Sustainable Solution to Food Insecurity and Waste

By Sverre Puustusmaa, CEO & Founder, Tactical Solutions

The world faces a dual food crisis: widespread insecurity, with over 700 million people going hungry, and massive waste, with nearly 40% of food lost globally each year. This contradiction is staggering, but thankfully innovative technologies are offering hope.

Freeze-drying provides an effective solution to both of these challenges. This process can preserve food for up to 25 years while retaining 97% of its nutritional value, the process addresses critical issues of spoilage and accessibility. Additionally the lightweight, shelf-stable characteristics of freeze-dried food makes it ideal for emergency relief, global aid distribution, and supplying remote regions.

Freeze-drying improves food security and reduces waste by preserving surplus produce for future use. Compared to traditional preservation techniques, the method lowers greenhouse gas emissions and consumes less energy. As population growth and climate change exacerbate global challenges, freeze-drying could be crucial in developing a sustainable and resilient food system.

What is Freeze-Drying?

Freeze-drying is a preservation method that involves first freezing the food, then using a vacuum to remove water through a process called sublimation. Freeze-drying helps retain the food’s nutritional value, preserves its texture and flavor, and extends its shelf life without the need for refrigeration. Unlike traditional dehydration, which uses heat and can degrade both nutrients and taste, freeze-drying results in a lightweight product that is ideal for storage and transport.

Freeze-drying is a versatile process that can be applied to various types of food, including fruits, vegetables, dairy products, and complete meals.

Emergency Relief Support

As food insecurity becomes a growing global challenge, innovative technologies such as freeze-drying offer essential solutions. This method preserves food in a way that maintains the benefits of the original product, effectively bridging the gap between surplus resources and areas facing scarcity. From emergency aid to improvements in long-term supply chains, freeze-drying addresses a wide range of needs in the fight against hunger.

In humanitarian crises caused by natural disasters, conflicts, or pandemics, rapid access to nutritious food is vital. Freeze-dried meals are lightweight, compact, and easy to transport, making them ideal for emergency responses. With the simple addition of water, these meals can provide essential nutritions, even when infrastructure is compromised.

For isolated or underserved regions, where fresh produce is scarce due to logistical challenges, freeze-dried food offers a reliable alternative. Its long shelf life and nutrient retention ensure that communities can access essential vitamins and minerals without dependence on regular supply chains.

Freeze-drying also reduces spoilage during transit, which is especially important when moving food across long distances. Its reduced weight lowers transportation costs, while its durability minimises losses caused by handling and environmental factors.

Addressing the Food Waste Pandemic

Food waste is a major contributor to global greenhouse gas emissions, with approximately 8 – 10% attributed to discarded food. Freeze-drying can play a significant role in reducing this waste by preserving the surplus of food that goes unused everyday. For example, peak harvests that would otherwise go unsold can be processed into freeze-dried products, extending their usability and preventing spoilage.

By requiring no refrigeration during storage or transportation, freeze-dried products significantly reduce energy consumption and associated carbon emissions. These attributes make the technology a key player in building resilient, sustainable food systems.

This approach turns potential waste into a valuable, long-lasting resource. Additionally, freeze-drying uses less energy than methods like canning or freezing, making it a more sustainable choice for large-scale food preservation.

Economically speaking, freeze-drying supports local producers by creating markets for surplus crops that might otherwise be discarded. It also empowers aid organisations by enabling them to stockpile food supplies for future crises, reducing reliance on reactive procurement.

The Future of Freeze-Drying

As the global population is projected to reach 9.8 billion by 2050, the demand for food is expected to increase by 60%. This growing need will require new and innovative approaches to production, preservation, and distribution. Freeze-drying offers a scalable solution that can meet these demands while addressing sustainability goals.

For governments and organisations, investing in freeze-drying technology and infrastructure presents an opportunity to enhance food security, reduce waste, and mitigate the environmental impact of food systems. By integrating freeze-drying into supply chains, nations can build resilience against future disruptions, including climate change and geopolitical instability.

Freeze-drying is more than a technological advancement – it’s a critical tool for addressing the interconnected challenges of food insecurity and waste. By extending shelf life, retaining nutritional value, and reducing spoilage, freeze-drying has the potential to reinvent how we store and distribute food.

As the world faces growing environmental and humanitarian challenges, embracing sustainable innovations like freeze-drying will be essential to creating a more equitable and food-secure future. Through collaborative efforts between governments, aid organisations and private bodies, this technology can help reshape global food systems for the better, for everyone.


Bio:

Sverre Puustusmaa is the CEO and founder of Tactical Solutions, a company he established in 2016. With a background as a soldier in the special forces and a medic in challenging conditions, Sverre was inspired to create a solution to the low-quality military rations he encountered during critical missions. His frustration with inadequate food led to the development of a solution that prioritises high-quality, nutritious meals in all conditions.

Under Sverre’s leadership, Tactical Solutions has pioneered innovations in food technology and sustainability. The company’s mission is to deliver nutritious, economically efficient food solutions without compromising on taste, embodied through successful brands like Tactical Foodpack and Chef Urban. Sverre’s focus on quality drives his commitment to ensuring that food should never be compromised.

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Beyond oil: Unlocking the potential of the lubricant industry

By Leyla Alieva, Co-Founder and CEO of NEOL Copper Technologies, and Paul Whiting, CEO of Delta-Xero

The lubricant industry is an important yet often overlooked cornerstone of the global economy, ensuring the seamless operation of machinery across numerous sectors. Despite its importance, the sector doesn’t get the attention it deserves. Many businesses underestimate the value and capabilities of advanced lubrication programs, leading to missed opportunities to maximise the efficiency and lifespan of equipment, as well as prevent the excessive consumption of oils.

As industries face growing pressure to prioritise sustainability and reduce carbon footprints, the use of traditional lubrication practices is becoming a significant challenge. Businesses need to consider not only the technical performance of lubricants but also their environmental impact—both in production and usage. Companies must shift their focus toward selecting, and investing in, more sustainable and efficient lubrication solutions, driving their respective industries to resilience through circular economy.

Critical role of lubricants in driving efficiency

Lubricants are far more than a technical necessity—they’re vital for minimising friction, reducing wear, preventing unexpected downtime, and extending the life of equipment. High-quality lubricants can significantly decrease maintenance costs and operational downtime. For instance, in sectors like transportation, efficient lubrication can enhance fuel economy and reduce emissions.

However, many businesses in the UK are still unaware of these benefits. Too often, users opt for cheaper oils, without realising the long-term costs to machinery performance and environmental sustainability. At the same time, equipment failures are frequently blamed on oils, when the real culprit is poor oil management.

This highlights a pressing need for education around the advantages of advanced lubrication. By providing education on innovative lubricants and lubrication practices, companies can empower users to make informed choices, which ultimately leads to better machinery performance and reduced waste. For instance, synthetic base oils additised with copper filming technology allow companies to maintain machinery efficiency without aging, breakdowns, or toxic emissions.

Addressing the environmental impact of lubricants

As the push toward Net Zero 2030 intensifies, industries can no longer ignore environmental pressures. The lubricant industry contributes to carbon emissions through oil and natural gas extraction, production, and disposal. But there are solutions on the horizon to minimise this contribution —innovative companies are leading the charge toward sustainability. A combination of high-quality synthetic lubricants and filtration can significantly reduce the overall consumption of lubricants and associated carbon emissions.

Additionally, this “dynamic duo” can reduce the frequency of oil changes, leading to lower waste generation and reducing the overall cost of lubrication. Extending lubricant lifespans through innovative filtration solutions could revolutionise lubricants sector and dramatically reduce environmental impact.

Embracing the circular economy

The lubricant industry is beginning to embrace the principles of the circular economy, prioritising value over volume, a shift that is redefining its future. Traditionally, spent lubricants were treated as waste, but that mindset is also changing. Recycling and reusing oils is no longer just an option—it’s a necessity.  Reconditioning used oils by removing contaminants and restoring their properties conserves valuable resources and reduces environmental harm.

Major oil companies are now exploring oil filtration and recycling as viable solutions, signaling a shift toward sustainability. This is more than a trend; it’s a transformative movement reshaping the industry.

While synthetic lubricants are typically more efficient than conventional oils, their higher cost has deterred many industries from making the switch. However, as filtration methods advance extending their useful life, the long-term cost savings of synthetic lubricants become clearer and adoption rates are expected to rise.

Looking forward

Machinery lubrication plays a critical role in addressing some of today’s biggest industrial challenges, from improving performance to reducing carbon emissions. Advanced lubrication practices not only extend equipment life and enhance efficiency but also help cut waste and support sustainability. By adopting innovative solutions like reconditioning oils and synthetic base oils, businesses can drive operational success while reducing their environmental impact.

As the industry evolves, it’s crucial to recognise the potential of advanced lubricants in solving both business and environmental issues. They are more than just maintenance tools; they are key drivers of sustainability and efficiency. By embracing these innovations, companies can boost their bottom lines while contributing to a more sustainable future for the planet.

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