What insurers look for when underwriting governance risk in AI and digital systems

Insurers underwriting professional, cyber, and financial lines risk are increasingly required to assess not just whether organisations use AI or digital systems, but how those systems are governed in practice.

In claims scenarios, disputes rarely turn on whether a policy or framework existed. They turn on whether governance can be evidenced clearly and defensibly at the time decisions were taken.

Why governance evidence matters in underwriting

Underwriters and claims teams operate under asymmetric information. When losses arise, they must quickly determine:

What systems were in use at the time of the incident
Who was accountable for those systems
What governance decisions had been made
Whether reliance on those systems was reasonable

Where governance evidence is weak or retrospective, insurers face greater uncertainty — often resulting in exclusions, higher premiums, or contested claims.

The limits of policy-based assurance

Many organisations provide governance policies, risk statements, or committee terms of reference during underwriting. While necessary, these artefacts rarely answer post-loss questions on their own.

Common gaps include:

No system-level accountability mapping
Unclear versioning of governance decisions
Lack of time-stamped evidence
Difficulty proving what was relied on at the time

What insurers increasingly expect to see

Across underwriting and claims review, expectations are shifting toward proportionate, system-level governance evidence, including:

Clear registers of AI and digital systems
Named ownership and accountability
Documented governance and risk decisions
Immutable, time-fixed records of oversight
Evidence suitable for independent review

From risk assessment to defensibility

Insurers are not seeking to second-guess organisational judgement. They are assessing whether governance was exercised responsibly and can be demonstrated with confidence.

Where governance evidence is durable, disputes are clearer, claims are cleaner, and underwriting decisions are easier to justify.

Why this matters now

As AI-assisted decision-making becomes more prevalent, insurers are increasingly exposed to ambiguity around accountability. Evidence-based governance helps reduce that ambiguity — for insureds and insurers alike.

About this briefing

This briefing reflects discussions with underwriters, claims professionals, and risk advisors navigating evolving expectations around AI and digital governance.