MTech Capital Co-founder and Partner, Kevin McLoughlin, was interviewed back in April on the deployment of AI/ML in the underwriting process and why human oversight is still necessary as models advance. Unintended biases appear in AI/ML models even with the best of intentions and require data scientists to constantly monitor them to ensure fair assessments and pricing for customers. MTech Capital is an investor in startups like Monitaur.ai, which offers automated auditing of ML models to financial services companies, and Akur8, which helps actuaries build pricing models that use ML but are transparent by design.
Carriers that are early to exploit the potential of ML in underwriting should be able to price more accurately, allowing both higher top line growth and reduced claims. But there are risks that ML models, if not continuously monitored, gradually develop unintended biases that can produce unethical outcomes.