Understanding AI Exposures: AI Loss Scenarios Survey Results

Artificial intelligence is no longer a future consideration for insurers, it is a present-day risk.

Across the Lloyd’s market, boards are now ranking AI risk as second only to geopolitical risk on their risk registers, underscoring how quickly AI has moved from innovation opportunity to material exposure.

In response to the absence of credible underwriting and claims data, the Lloyd’s Market Association (LMA) conducted a market-wide opinion survey in mid-2025 to better understand how insured AI risk is emerging in practice.

The survey sought member views on whether insureds are already using AI in ways that could trigger claims, which loss scenarios present the greatest concern, how effectively those risks are being managed, and the potential scale of losses insurers may face.

The analysis focuses on four high-impact scenarios spanning professional indemnity, product recall, accident and health, and cyber insurance:

• Professional Indemnity: “AI produces erroneous advice/service to clients, causing a loss.”
• Product Recall: “Recall required following property damage and/or bodily injury caused by defective products designed and/or manufactured by AI, e.g. food contamination.”
• Accident and Health (A&H): “Self-driving car error causes injury to passenger: first-party A&H policy could respond in first instance.”
• Cyber: “System downtime caused by AI malfunction and resulting Business Interruption.”

Together, the findings offer a valuable snapshot of where AI risk is already intersecting with insurance coverage and where insurers may be underestimating future exposure.

The full report will help provide a full understanding of how AI risk is evolving, where insurers see the greatest threats and what this means for underwriting, claims and governance decisions now.

Download the report