Swiss Re warns of the 'dark side' of artificial intelligence

The Swiss Re Institute has once again activated the radar it uses each year to detect new risks that could threaten insurance and the global economy. And the destabilizing potential of technologies, and in particular artificial intelligence (AI), stands out this time among the most important dangers.

"The evolution of digital technologies is transforming the risk landscape," note the experts from the reinsurer's analysis service in the latest Sonar 2025 report. Specifically, they elaborate, the number of AI-related issues is increasing sharply. "From 2023 to 2024, these incidents grew by more than 60%," they point out.

As more people and businesses interact with AI, there could be a surge in claims , Swiss Re anticipates. "Recent spikes in litigation have been driven by allegations of intellectual property infringement and defamation lawsuits (some stemming from major language models like ChatGPT)." This could contribute to a future surge in so-called social inflation (higher claims costs that affect insurers for reasons other than economic ones).

Furthermore, innovative approaches such as generative artificial intelligence can also be vulnerable to sophisticated frauds such as deepfakes (videos, audios or images manipulated by AI) and the spread of disinformation through social media, which, among other things, raise concerns about the implications for civil liability, explains the Sonar 2025 report.

Banks, fintechs , and investment firms stand out among the most exposed to this threat, due to the large sums of money they manage and their dependence on digital transactions, the authors note. Other sectors, such as media, telecommunications, and the pharmaceutical industry , are also susceptible to being affected by manipulated content that can erode trust and lead to loss of reputation and publicity.

Given this scenario, Swiss Re Institute experts warn, the insurance industry is still in the early stages of the product development cycle, "and coverage, exclusions, and standardized wording still need to be clarified." Furthermore, developing strategies to combat these problems imposes additional operational demands on insurers, affecting efficiency and resource allocation.

Technology isn't the only source of insurance risk that's gaining ground. Sonar 2025 identifies other emerging threats , with rising temperatures being a key one. "Up to half a million people worldwide succumb to the effects of extreme heat each year, according to recent scientific research, surpassing the combined impact of floods, earthquakes, and hurricanes," Swiss Re states.

This, coupled with the forecast that heat waves will occur more frequently in the coming years, places this phenomenon among the most significant risks. "Its implications for claims are numerous, resulting in a higher number of accidents, illnesses, chronic conditions, and even death . Extreme heat can also overload healthcare systems, raising the cost of health insurance," the report's authors emphasize.

Another growing risk assessed by the Swiss Re Institute is the damage caused by plastics . This material and its particles have already generated litigation due to environmental pollution and its impact on human health, according to the analysis service. Furthermore, the increased consumption of ultra-processed foods , the expansion of the drone industry, and the proliferation of fungi are also cause for concern for the insurance sector, according to Sonar 2025 .