Confidently Wrong: Managing AI Hallucination Risk in Insurance

Artificial Intelligence is increasingly used across insurance, from underwriting and claims handling to client communications and internal decision-making. However, one of the most significant and least understood risks is AI hallucinations: situations where AI systems generate confident but incorrect, misleading, or fabricated information. This one-hour webinar is designed specifically for insurance professionals and explores how AI hallucinations can create material risk at every stage of the client journey.

We will examine the exposure arising from client disclosures, the impact on claims assessment and decision-making, and the internal risks associated with staff reliance on AI tools without adequate controls. Through practical examples from other professions and insurance-specific scenarios, attendees will gain a clear understanding of where hallucinations occur, why they matter from a legal, regulatory, and reputational perspective, and how to put in place appropriate safeguards.

Learning outcomes By the end of the session, you will be able to understand:
➢ identify where AI hallucinations commonly arise in insurance contexts, including client disclosures, claims handling, and internal operational use.
➢ understand the legal, regulatory, financial, and reputational risks posed by AI-generated inaccuracies and false outputs.
➢ implement a strategy to mitigate AI hallucination risk through governance, human oversight, validation processes, and staff usage controls.

This session is jointly delivered with the VOX-Pol Institute. Jeff Heasman is a member of the Advisory Board and the VOX-Pol Institute will be represented by Professor Stuart MacDonald.