2026-08-10 · Source: Insurance Business UK
Summary in 3 Points • UK cyber insurers are grappling with underwriting AI-related exposures • Some insurers offer full AI cover, while others cap it at £250,000 • The EU AI Act's timeline affects AI regulation and insurance compliance --- UK cyber insurers are facing challenges in underwriting AI-related risks as clients increasingly use generative AI tools. Insurers are divided on how to cover these risks, with some offering full AI cover up to the policy's total limit, while others impose caps, reflecting uncertainty due to limited claims data. The EU AI Act, which will enforce obligations for general-purpose AI models from August 2025, adds to the regulatory complexities insurers must navigate. Meanwhile, clients and brokers are seeking clarity on policy responses to AI-related incidents, as insurers work to balance broad coverage with specific exclusions.
The evolving AI landscape presents both challenges and opportunities for the London insurance market. Underwriters may need to revise policy wordings to address AI-related exposures explicitly, potentially affecting pricing and coverage limits. As AI adoption grows, insurers could face increased claims activity, necessitating adjustments in risk assessment and underwriting strategies. Additionally, the shifting regulatory environment, particularly with the EU AI Act, may influence compliance requirements and policy offerings, prompting insurers to stay agile and informed about legislative changes.