One of the most urgent current issues in the D&O insurance marketplace is the question of how artificial intelligence (AI) will impact the D&O liability and insurance landscape. In order to get a sense of the industry’s current thinking on AI-related issues, The D&O Diary, in collaboration with Allianz Commercial, recently prepared and distributed a survey seeking readers’ views on several AI-related topics.

The survey drew 250 responses from industry professionals located in the United States, Germany, the United Kingdom, Canada, and 21 other countries. The strong response provides a detailed picture of how the insurance industry views this new and challenging technological frontier.

The survey questions and their responses fall into two general groups, those pertaining to corporate governance and those pertaining to D&O underwriting.  Respondents were grouped into three primary categories: insurers, brokers, and insured companies.


AI and Corporate Governance

The responses to the survey’s governance-related questions suggest that AI governance has emerged as a significant concern for D&O insurers, brokers, and insured companies. Across all respondent groups, there was strong agreement that AI presents potential D&O exposure and that boards should address AI-related risks through existing governance and oversight frameworks.

There was even stronger agreement among respondents regarding the board’s governance responsibilities. Ninety-four percent of respondents agreed or strongly agreed that boards should approve internal policies governing AI usage. These results reflect an expectation that boards provide oversight of the company’s AI governance framework and related risks.

The strongest consensus in the governance portion of the survey concerned the integration of AI oversight into the broader corporate governance framework. Responses were remarkably consistent across insurers, brokers, and insured companies, with between 95.8% and 100% of each group agreeing or strongly agreeing that boards should ensure AI governance forms part of the company’s overall governance structure. Respondents appear to view AI not as a stand-alone technology issue, but as an enterprise risk that should be addressed through established governance and oversight processes.

The survey responses also provide an interesting perspective on the recent news that pending legislation in Delaware would permit the formation of autonomous companies that would be governed exclusively by AI agents with no human control. The survey responses suggest that industry professionals would oppose this possibility; the responses across all groups suggest that a nearly uniform view that human oversight should remain a requirement even for advanced AI-enabled decision systems.

Respondents also drew a direct connection between governance and claims risk. Overall, 94% agreed or strongly agreed that poor AI governance increases the likelihood of D&O-related claims. As with other business risks, weak controls can contribute to disclosure failures, compliance issues, and other breakdowns that may ultimately give rise to corporate and securities claims. Overall, 85.6% of respondents agreed or strongly agreed that AI-related regulatory, shareholder, and operational claims will significantly affect the D&O claims experience. 

AI and D&O Insurance

The survey responses showed greater divergence when it came to questions of the D&O insurance underwriting implications arising from the advent of AI.

For example, while 91.2% of insurers agreed or strongly agreed that lack of transparency around AI deployment should negatively influence the D&O underwriting assessment, only 59.1% of broker respondents agreed or strongly agreed with this proposition.

One question in which the responses split even within responding groups involved the inquiry whether the existing D&O insurance product needs amendment to adequately address growing AI exposures. About 55.6% of all respondents agreed or strongly agreed the D&O insurance policy needs amendment, while about 44.4% disagreed or strongly disagreed. This response split varied slightly between insurers, brokers and insured companies, but nevertheless was largely consistent for all groups. The survey also allowed respondents to provide written responses about this D&O policy amendment question; the written responses are summarized in a separate section below.

There were other underwriting-related questions where the responses reflected a greater consensus. For example, around 80% of all respondents indicated that they expect D&O underwriters to request additional information regarding applicants’ AI risks and underwriting practices. Interestingly, responses to this question were more or less consistent across all response groups.

The survey also asked respondents to rank order various AI-related risks in order of concern. The responses clustered closely together, making generalizations challenging. However, the responses do seem to show that the respondents consider AI-related Capital Expenditure to be the most significant area of AI-related concern, followed closely by AI Washing, Data Privacy, Regulatory Proceedings, Algorithmic Discrimination, and Intellectual Property. Again, because the rankings of these concerns were close to being evenly distributed, it may be difficult to draw definitive conclusions about how the industry weights the areas of concern.

Respondents’ Written Comments

As noted above, the survey question asking whether the respondent believes the D&O insurance policy needs to be amended to address emerging AI-related risks invited respondents to supplement their answer with written comments. Although not all respondents provided written comments, the comments that were provided offer some interesting perspective.

The predominant view expressed by respondents who provided written comments is that current D&O policies are generally adequate to address insured companies’ AI-related exposures, and that as a general matter AI should be treated as another business, operational, or governance risk rather than a fundamentally new category requiring a major policy redesign. However, the respondents did also express a range of views, from those advocating no policy changes at all to those supporting targeted clarifications, affirmative AI coverage, or even standalone AI liability products. In addition, several commentators expressed the view that more experience and data are needed before the need for D&O policy changes or innovations can be fully assessed.

Here is a representative sampling of the written comments:

While AI is a relatively new technology and undoubtedly presents certain specific challenges, the duties of care and diligence expected of directors and officers are not different from those arising from other business challenges.

The D&O wordings were in the past, at the moment, and will be in the future strong enough.

Insureds are looking for affirmation of coverage not new, additional exclusions.

I would encourage the D&O underwriters not to take an immediate restrictive approach for coverage pertaining to AI related exposures.

I’m unsure changes to policy wordings is required before loss data and jurisprudence answers questions regarding exposure.

Observations About the Survey Results

Allianz Commercial believes the survey results highlight a growing consensus that AI should be viewed not simply as a technology issue, but as a governance and risk management challenge. Respondents drew a strong link between effective AI governance and reduced claims potential, reinforcing the importance of board oversight, accountability and transparency as organisations adopt AI across their operations. The findings also suggest that insurers and insureds will need to engage in more detailed discussions around AI governance practices as part of the underwriting process, with governance frameworks becoming an increasingly important indicator of risk quality.

Dan Holloway, Global Head of PI & Management Liability Commercial, Financial Lines at Allianz Commercial, comments: “The survey results are clear: AI is as much a governance issue as it is a technology issue. From a D&O underwriting perspective, AI governance must be a boardroom agenda item. Directors should be actively overseeing the opportunities and risks associated with AI deployment. As AI becomes embedded in business processes and strategic decision-making, documented policies and effective oversight mechanisms will become increasingly important indicators of risk quality. For insurers, the focus is not simply whether an organisation uses AI, but how effectively it governs it.

“AI does not necessarily create entirely new categories of claims. Rather, it amplifies and reshapes risks that directors and officers already face, including disclosure failures, regulatory investigations, shareholder litigation, intellectual property disputes, data privacy concerns and allegations of inadequate oversight. AI is not a standalone liability. It is a force multiplier, increasing the scale, speed and complexity of existing governance challenges. Companies with mature governance frameworks and strong board oversight are likely to be better positioned to navigate these evolving risks.”

Burkhard Fassbach, an attorney specializing in D&O liability in Germany who participated in the survey’s planning and completion, noted with respect to the survey results that “With the US-China AI race accelerating, Europe risks strategic marginalization. Exclusion from premier frontier AI models would entrench a critical dependency on foreign technology, deepening existing geopolitical vulnerabilities. This gives rise to a new dimension of systemic liability – a ‘sovereignty gap’ that undermines both corporate resilience and long-term competitiveness.”

Conclusion

The insights gathered from this survey provide a valuable baseline for understanding the industry’s current posture toward AI. We are grateful to the 250 professionals who took the time to share their expertise. The survey findings underscore the need for both rigorous corporate oversight and proactive underwriting, and will contribute to continuing industry discussions, including future editions of the Allianz Risk Barometer.

We would also like to express our gratitude to our friends at Allianz Commercial for their collaboration on this project. As the corporate risk landscape continues to evolve, we look forward to continuing the conversation.

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