Armilla AI increases Lloyd's-backed coverage
Armilla AI has raised its Lloyd’s-backed AI risk coverage capacity to $25 million. The increase is a response to traditional insurers pulling back from underwriting risks associated with artificial intelligence. This move highlights the growing demand for specialized insurance products that can dynamically assess and cover new technological exposures.
- Major insurers including AIG, Great American, and WR Berkley are actively seeking regulatory approval to exclude or limit liability for claims arising from artificial intelligence systems. This retreat is driven by concerns that a single AI model failure could trigger simultaneous, systemic losses across thousands of policyholders, a risk traditional actuarial models are not designed for. - The new policy from Armilla is a specific AI Liability Insurance underwritten by Lloyd's syndicates, including Chaucer, providing affirmative coverage for core AI performance risks like malfunctions, hallucinations, and critical inaccuracies. This contrasts with traditional Technology Errors & Omissions policies that often leave such AI-specific failures in a coverage gray area or exclude them entirely. - Armilla's underwriting process relies on its "Armilla Verified" assessment platform, which evaluates an AI model's performance, fairness, and security against global standards before a policy is issued. This verification provides the data needed to price the specific risk of the AI product. - The market for AI in insurance is forecast to
