Once in a while, a technological innovation reshapes the world, forcing businesses to adapt—or risk falling behind. Today, that innovation is Artificial Intelligence (AI). This powerful technology is rapidly transforming workflows, driving innovation, and reshaping industries. Insurance is no exception. From chatbots to online quote tools, AI in insurance makes processes faster and more convenient. But what happens when AI gets it wrong? According to recent guidance from the Registered Insurance Brokers of Ontario (RIBO) and legal experts, the answer is clear: brokers are ultimately responsible for AI-generated information. Even if AI helps create the information, licensed brokers must review, verify, and stand behind it before it reaches clients. This article explores RIBO’s expectations for AI use in insurance and what they mean for brokers and customers.
AI and Insurance: The Broker’s Duty Still Stands
During a recent Provincial Insurance Regulatory Update webinar, Jaime Cardy, a senior associate at Dentons Law, discussed new guidance from RIBO. The central issue: who is liable if a customer relies on incorrect AI-generated information?
Cardy predicts that, based on existing case law, liability rests with brokers. RIBO’s guidance echoes this, stressing that:
- AI outputs must be reviewed by a licensed broker before being shared with clients.
- Firms using AI in underwriting should regularly audit outputs to catch errors or systemic bias.
- Brokerages must be transparent about customer-facing AI tools, such as chatbots and online quote engines.
In short, keeping “a human in the loop” isn’t just a best practice — it’s a vital safeguard.
Key Responsibilities for Brokers Using AI
Regulatory Responsibility
RIBO requires licensed brokers to monitor and verify any AI-generated advice or documents. This ensures clients receive accurate and reliable information. Cardy recommends going further: brokers should disclose when clients are interacting with AI, ideally with disclaimers, so customers know whether they’re dealing with a human or a machine.
AI as a Tool, Not a Decision-Maker
AI can support brokers, but it cannot replace professional judgment. Brokers remain responsible for providing clear, complete, and accurate information.
Legal Implications
If a client suffers a loss because of incorrect AI-generated advice, liability still rests with the broker. Most brokerages rely on third-party AI tools, which introduces added risks. As Dentons partner Marisa Coggins notes, brokerages must review AI-generated outputs, safeguard client privacy, and extend existing privacy policies to cover AI use.
Best Practices for Brokers
Insurance companies are actively using AI across their operations, from automating administrative tasks and personalizing customer interactions to more complex functions like underwriting risk, detecting fraud, and estimating claims. AI and machine learning allow insurers to process vast amounts of data at scale and speed, streamline their operations, and personalize service leading to a variety of improvements, including:
Key Areas of Implementation
- Underwriting & Pricing: Automating risk assessments and renewal evaluations.
- Claims Management: Analyzing accident images, estimating claim values, and detecting fraud.
- Customer Service: Chatbots and virtual agents offering 24/7 support.
- Marketing & Sales: Delivering personalized offers to clients.
- Back-Office Operations: Enhancing efficiency in finance, actuarial, and IT.
Benefits of AI in Insurance
- Faster processes and greater efficiency.
- More accurate risk assessments and fraud detection.
- Improved customer experiences through personalization.
- Reduced costs through automation and fraud prevention.
Challenges to Manage
- Preventing bias and discrimination in algorithms.
- Meeting growing regulatory scrutiny.
- Protecting client data and privacy.
“Including a human in the loop to verify AI-generated outputs is not only a best practice for responsible [AI] use, but it’s also a significant risk mitigation measure.”
What Clients Can Expect from AI and the Insurance World
At its core, insurance is about understanding risks and helping people quickly and compassionately when challenges arise. AI is enhancing this by spotting patterns in data to improve consistency. Additionally, it is using generative AI to analyze unstructured information and provide personalized, empathetic responses. Furthermore, it employs agentic AI to automate complex workflows, making insurance faster and more efficient.
This evolution has also raised customer expectations. Today, people expect:
- Human-like conversations with chatbots or voice agents.
- Hyper-personalized offers and communication.
- On-demand services tailored to their individual needs.
Generative AI’s ability to reason, judge, and create empathetic responses makes it especially transformative for both the brokers and their customers.
AI and Insurance Summary: Assist, Not Replace
Experts caution that brokers remain legally accountable for AI-generated information. To protect clients, RIBO requires that:
- AI-generated information must be checked by a licensed broker.
- Brokerages must disclose when AI tools are in use.
- Customers must always have the option to speak with a human.
- Client data and privacy must remain protected, even when using third-party AI.
AI may transform the insurance industry, but accountability does not change. No matter how advanced the technology, brokers remain responsible for mistakes made or generated by AI. Clients can take comfort in knowing that while AI brings speed and innovation, licensed professionals like our isure representatives are still ensuring accuracy, trust, and protection. You can feel confident knowing that your isure broker is accountable for giving you clear, accurate, and trustworthy information.
Artificial Intelligence, also known as AI, can be found everywhere. Read more
Did you know there are variations of AVs? Let's explore Read more
Nowadays, AI is being used more than ever. From typing Read more
