Over 90% of businesses worldwide have expressed interest in insurance coverage for Generative AI (Gen AI) risks, with two-thirds willing to pay at least 10% higher premiums for such coverage, according to a new report by the Geneva Association.
The Geneva Association surveyed 600 corporate insurance decision-makers across China, France, Germany, Japan, the UK, and the US to understand how businesses perceive Gen AI risks and their demand for related insurance solutions.
Findings show rapid adoption of Gen AI into products, services, and internal operations, with 71% of respondents having implemented Gen AI in at least one function. While this presents significant opportunities for innovation and efficiency, it also introduces complex risks, including defective outputs, biased recommendations, intellectual property infringements, and cybersecurity concerns—particularly when Gen AI models hallucinate or replicate protected content.
The report revealed that demand for Gen AI insurance coverage is strikingly strong, with medium-to-large firms, technology-intensive sectors, and businesses with high exposure or prior severe failures showing the strongest appetite.
Cross-market comparisons indicate that the greatest immediate opportunities for insurers are in the US and China, where adoption and insurance demand are highest, while continental Europe trails behind.
Among the specific Gen-AI-related risks for which businesses seek coverage, cybersecurity risks rank highest, cited by more than 50% of respondents, followed by liability risks to customers and suppliers, and general operational risks.
However, market challenges remain. Difficulties in verifying Gen AI risks and the potential for large losses raise insurability concerns, echoing challenges seen in cyber insurance.
The report also noted that insurers are experimenting with both policy extensions and standalone AI products, but modular approaches and cross-sector partnerships will be critical to closing protection gaps.
Jad Ariss, Managing Director of the Geneva Association, said, “Few technologies in history have spread as rapidly as Gen AI, yet its risks are complex and poorly understood. This report provides insurers with a clearer picture of business demand for insurance protection, helping the industry anticipate needs. Insurers have a unique role to play in ensuring that Gen AI adoption is safe and sustainable. The findings also underline the urgency for insurers, regulators, and technology providers to work together in developing frameworks that can safeguard businesses while enabling innovation to flourish across economies.”
Ruo (Alex) Jia, Director Digital Technologies at the Geneva Association and lead author of the report, added, “Generative AI amplifies some existing risks and creates entirely new categories of exposure that extend beyond traditional insurance boundaries. Our survey shows strong demand for risk transfer solutions, especially from firms that have already experienced severe Gen AI failures, but it also highlights insurability challenges. The task for insurers now is to define clear risk boundaries and pilot modular coverage models that can adapt to this evolving technology.”
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