AI Governance in Regulated Cloud-Native Insurance Platforms
Gowtham Reddy Enjam · International Journal of AI BigData Computational and Management Studies · 2023
Artificial Intelligence (AI) and cloud-native architectures are becoming increasingly critical to transforming the insurance industry, allowing insurers to update their legacy systems, process claims faster, and become more compliant with regulatory requirements. This paper discusses the importance of AI governance in regulated cloud-native insurance platforms and how governance frameworks can guarantee fairness, transparency, accountability, and privacy of AI-based decision-making. Kubernetes, service mesh frameworks, and event-driven architecture are examples of cloud-native technologies that can facilitate systems to scale services, incorporate AI modules, and ensure high availability, while also integrating governance into their design. Examining 2023 case studies in this study reveals that AI governance across insurers results in a 65% reduction in the time taken to settle claims, a 40% decrease in operational expenditure, and a more effective method of fraud identification, with strict compliance with GDPR and other requirements. The study also notes emerging frameworks, including Zero Trust Architectures, explainable AI, and automated regulatory reporting, which make governance a force, rather than a compliance burden, resulting in increased trust and innovation. Moreover, moral and social issues, such as algorithmic bias, fairness, and accountability, are also discussed in the context of the insurance business. Finally, future trends and developments that are of interest regarding governance over digital insurance ecosystems, including federated AI, regulatory sandbox, and adaptive policy, are touched on