The global market for AI-related insurance premiums is projected to reach approximately US$4.8 billion by 2032, growing at a compound annual growth rate (CAGR) of around 80%. This surge is driven by the increasing integration of AI across industries like healthcare, transportation, and finance, which introduces new risks such as algorithmic errors, autonomous vehicle accidents, and discriminatory AI practices. A 2023 Stanford University report highlighted a 2,500% increase in AI-related incidents since 2012, underscoring the need for specialized insurance to mitigate these risks. Insurers are developing tailored assessment frameworks to price these evolving risks, despite challenges like limited historical data. The European Union’s upcoming AI regulations, with potential fines up to US$38 million, are expected to further encourage businesses to seek coverage, similar to the rise in cyber insurance following increased cyberattacks.
By Satish Mehra
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