Whereas everybody is quite excited on the tech side of Artificial Intelligence there is a problem...and that is the legal issues that are created by using- and applying these AI techniques When illustrating this with an example one can already see the legal problems arising;
When in 2012 a police man drove up and stopped a luxurious car with a African man of not even 20 years, this policeman was publicly condemned for "profiling". The Police Department was actually ordered to stop by the Justice Department because, although the risk profile of the -car, man and age- combination was quite high, it was in itself not correct and discriminative to act on these premonitions. In 2018 the Police in that same country installed nearby a notorious pickpockets area of an premium brands outlet center on all roads approaching this center camera's connected to a bunch of computers actually predicting the chance of which cars would contain the pickpockets. Where an algorithm predicted the chance of an approaching car would contain pickpockets, the police stops and searches the vehicles. Beware that the Police as searching for, as they stated, a highly probability of finding pickpockets when a car contains more than 3 Rumanians and the car is a German rental car..... Everybody thought this to be a good initiative, where instead of trying to catch the thieves and pick pockets when they already have committed the crime, the Police was trying to prevent the crime... Apparently a lot has changed in publics opinion since 2012....
What has changed or can change when using AI The change therefor is the respons of somebody or something on the basis of a prediction. A computer programmed to look for the possibilities, changes and risk in advance. While in itself profiling can be helpful, it can be simple but serious legal problem. All laws, well most of the respectable countries laws, are based on the fact that the law rules on basically two things; what is and isn't allowed and what is the penalty when a law is not obeyed...
To start on the most simple one; can Justice enforce laws who are prevented by AI? Can a person be denied the access to a Outlet Center on the sheer fact that he rented a car in Germany? The answer is clearly no. So why bother in trying to prevent it..? Can a policeman even stop this car...in 2012 he couldn't. Can a Policeman actually try to find out if this is a criminal this way...also a clear no; he would be severely invading this person's privacy...another great law.
So there is a problem when enforcing and acting on AI when used for predictions
For insurance companies, what about AI? Clearly it is the dream of any insurance company to predict all risks. Because it will lower their risk as well and, without any doubt, will have them make more profits. They can use all data available and predict and specify the risk. and adjust the policy costs to that risk profile. And even better, they can start very focussed campaigns on specific customer groups (till the level of even a (one) person) to lower the risks... on accidents, fire, health problems etc. Thats is not a challenge, it is their job.
But here is the legal catch; An insurance company client has to give the company all information decently needed for the company to be able to calculate the risk. For a car insurance one can imagine that car, km's, price, age and some minor things are important. AI will not work like this. AI will make a profile of many pieces information, even if they are not a subject matter and build with an algorithm a risk profile.
What do you think is the legal difference? Legally the insurance company will abuse your privacy rights to the limit. They can't make a profile based on AI simply because they will use information which is not relevant for the product they sell nor is it their business to know. An insurance company can ask you to inform them on the things they want to know. You can refuse if wished. When an insurance company uses AI, they will probably ask you no more than your social security number and than they will come up with your car insurance... While also taking into account that you have 2 cats, red hair and your mum has a milkman who retired 2 years earlier than the average lawyer would do. And.....
And that is only the first issue; your privacy.
The impact of AI but also blockchain will be huge.The biggest changes will be smart contracts enabled by blockchain instantaneously will authorise payments from a customer’s financial account. But also the utmost tailored insurance contract, almost fully individual, will speed up the whole chain. Well, the chain will be gone by than and fully redesigned.