Technology

In this chapter of our Annual Insurance Review 2024, we look at the main developments in 2023 and expected issues in 2024 for technology.

Key developments in 2023

In 2023, the European Commission proposed the first-ever regulation of Artificial Intelligence (AI): the Artificial Intelligence Act (“AI Act”). The AI Act aims to balance the protection of human rights and the promotion of innovation and growth in AI.

The AI Act classifies AI systems into four risk levels: unacceptable, high, limited, and minimal. It bans AI systems that harm human dignity, such as those that manipulate human behaviour. It imposes strict rules on high-risk AI systems, requiring accountability, governance, and human oversight; and finally, it mandates transparency and user information for limited and minimal risk AI systems, such as chatbots or video games.

The AI Act also tackles the issue of generative AI, such as ChatGPT, which can produce realistic content that mimics human-made. It obliges that such content is marked as artificial and that users are informed about its origin and purpose.

The legislation is expected to come into force in 2026, after the approval by the Parliament and the Council and a two-year transition period. As an EU Regulation, it will apply directly in all EU Member States, ensuring a harmonised approach. However, some critics have argued that the AI Act is too inflexible and may leave regulatory gaps as technology advances.

Nevertheless, the act is a ground-breaking initiative that will shape the future of AI in Europe and the world. It remains to be seen how the UK will react.

What to look out for in 2024

On 8 March 2023, the UK government unveiled a new bill, aiming to save the UK economy more than £4 billion over the next 10 years by updating and clarifying the UK’s data protection laws. The Data Protection and Digital Information (No 2) Bill (The ‘DPDI bill’) replaces the previous DPDI Bill (No 1), which was introduced in July 2022.

The new Bill does not replace the existing UK Data Protection legislation, but instead makes some important changes and clarifications to the current rules.

One potentially significant change is the broadening of the definition of scientific research. Under the current law, there is some ambiguity and confusion about how personal data can be processed for research purposes, which creates various legal hurdles and costs for researchers and innovators. The new Bill defines scientific research as ‘processing for the purposes of any research that can reasonably be described as scientific, whether publicly or privately funded and whether carried out as a commercial or non-commercial activity.’

This change is expected to be welcomed by the technological industry, as it will reduce the administration and legal costs involved in conducting research which involves the processing of personal data. It will also enable more innovation and collaboration in the fields of artificial intelligence, biotechnology, health, and social sciences. However, the exact scope and application of this definition is still unclear, and it remains to be seen how it might work in practice.

The new Bill is currently under consideration by Parliament, and it is hoped that it will be passed into law soon. The UK government claims that the Bill will ‘support the UK’s data economy, enhance public trust in data use, and promote the UK as a world leader in data-driven innovation and research.’

Written by Lauren Kerr.