Physical AI Era Draws Near, Insurers Prepare for New Risks

Physical AI Set to Move Into Industrial Sites
Will Robots Reduce Workplace Accidents While Creating New Risks?
Risk Assessment and Insurance Coverage Expected to Change

As the use of robots equipped with physical artificial intelligence (AI) expands across industrial sites, the insurance industry is expected to change how it assesses risk. Robots can take over hazardous tasks and use on-site data to prevent accidents, but malfunctions and software errors can also create new risks. As field trials of humanoid robots are permitted and efforts are underway to develop underwriting technologies that account for how robots operate, upgrading insurance coverage to address related risks is emerging as a new challenge.

According to the insurance industry on October 15, Lloyd's, the British insurance market, selected Optimizing Technologies, a company developing an underwriting framework for autonomous mobile robots and humanoids, to participate in its in-house innovation program, Lloyd's Lab, last month. The company is developing data analytics technology to help insurers assess risks based on information about how robots operate and the environments in which they are used.

Lloyd's believes that risks associated with advanced robots using physical AI and autonomous vessels should be assessed separately in ways that reflect their technological characteristics, rather than addressed solely through existing general liability insurance. It has also identified technologies for calculating premiums using real-time operational data and actuarial models tailored to robots as priorities for developing new insurance products.

Physical AI is attracting particular attention because it could provide insurers with new tools for assessing risk. Robots can not only take over tasks with a high risk of industrial accidents but also use information collected at worksites to identify the likelihood of an accident. For example, a robot could patrol a semiconductor manufacturing facility to inspect the condition of pressure gauges or detect gas leaks. Insurers have so far assessed risk by considering a business's industry, facility characteristics, accident history, and level of safety management, among other factors. Going forward, they may also use information collected by robots about equipment condition and working environments to analyze risk levels and factor them into premium calculations.

The introduction of physical AI at domestic industrial sites is taking shape. On October 13, the Ministry of Trade, Industry and Energy held a Regulatory Exemption Review Committee on Industrial Convergence and approved field trials deploying mobile humanoid robots at semiconductor, automotive, shipbuilding, and logistics sites. Previously, the requirement to install safety fences around industrial robots had restricted the deployment of mobile humanoids in areas shared with people. The regulatory exemption will now allow field trials to proceed with enhanced safety standards.

An insurance industry official said, "There is currently a lot of interest in investing in physical AI and deciding where to introduce it, but to actually run a business, it is also important to consider how to prepare for the risks that may arise in the process. Experience with related accidents and risk assessment standards are needed to evaluate new risks and set appropriate premiums." The official added, "Autonomous robots can cause injuries or disrupt facility operations because of software errors, sensor malfunctions, or hacking. Domestic insurers should also build expertise in this area and establish a system for sharing risks through cooperation."

This content was produced with the assistance of AI translation services.