Artificial intelligence (AI) has emerged as a transformative technology. Yet despite its numerous benefits and potential to transform the insurance industry, AI poses many risks and challenges, including ethical dilemmas, privacy concerns, and security threats. Understanding these risks is crucial to harnessing AI's power responsibly and effectively. In this briefing note, we explore:

• Potential uses of AI in the insurance industry
• The European Union’s AI Act, its scope, and its implications for AI development and deployment
• Various risks associated with AI, their implications, and strategies to effectively manage these risks