Moral Dilemma Analysis of AI Application in Insurance

Running head: MORAL DILEMMA ANALYSIS OF AI APPLICATION IN INSURANCE
MORAL DILEMMA ANALYSIS OF AI APPLICATION IN INSURANCE
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Introduction

1MORAL DILEMMA ANALYSIS OF AI APPLICATION IN INSURANCE
Application of Artificial intelligence or AI technology has various benefits. It automates
decision regarding providing insurance to individuals according to their requirements. It also
provides automatic quotation for insurance package, which is also customisable according to the
needs of the consumer.
Discussion:
Ethical decision-making framework:
The framework chosen for the ethical analysis is The Blanchard-Peale Framework. It is a
simple and effective framework for deciding if an action is ethical or not. It consists of three
component for ethical analysis. These components are:
Legal aspect of activity: When an activity is conducted, it should be analysed from legal
framework. An activity needs to be consistent with relevant rules and regulations before it is
considered as ethical. This is one of the first and most important aspect of any ethical analysis
according to this framework.
Fairness of activity: While doing any activity it is important to identify if individual has been
honest or not while conducted any activity. Action has to be honest and fair with respect to
interest of larger entity. If this is not achieved, the action is not ethical.
Personal realization for activity: Personal reflection on any activity is important to identify
and analyse ethical issue associated with an activity.
This framework is applied to analyse important ethical consideration required for IS professional
to consider while designing health insurance policy.
Legal aspect of activity:

2MORAL DILEMMA ANALYSIS OF AI APPLICATION IN INSURANCE
Application of AI in providing insurance policy has various benefits, it Automates decision
regarding health insurance claim and helps in payment adjustment. It create a strong portfolio in
the market for the company. Along with that, company will have competitive and strategic
advantage over traditional insurance provider, which is a long-term benefit for the company. For
individual staff the benefits include customers efficiently through integration of chatbots,
automate decision regarding insurance claim, and manage payments and other technical aspect of
the service. As company grow with their service through effective business process, it will
benefit staff of the company in long term. The business clients will be benefitted from this
technology as well. Artificial intelligence helps them avoiding fraud in insurance settlement and
get price quote for insurance faster. In addition, concerning industry, it provides context for
innovation and enrich industry with application of technology. Along with benefits, it has some
drawbacks as well, not only for the organization who is providing insurance policy, but also for
all the entities considered in the ethical framework.
According to data protection regulation, if data is collected about individuals specially critical
information like health data, it has to be protected. If data collected for this purpose is hacked, it
will bring legal action against the company. Too much dependence on technology might affects
skills of the employee in long terms, application of AI might bring threat to traditional insurance
provider, and this might affect the industry itself in long term.
Various sophisticated tools are available for exploiting data security and this has to be considered
for data security as well. It is not enough to only consider that data collection is legal, it is also s
to secure these data as well for ensuring that data is secured. Hence, after collecting data for
automation with AI technology, these data has to be encrypted. Once data is encrypted, it is
difficult to access this data. Hence, data after collecting from individuals needs to be stored in
secure place.
For applying data in automation through AI, it is important to ensure that data is accessible from
anywhere. Hence data needs to be stored in the cloud. for this private cloud technology has to be
considered which ensures that data is not shared between others. These aspects are important too
for enhancing data security and data processing.
IS professionals will have to take this consideration into account while collecting data for
providing health insurance and designing health insurance policy.
Fairness of activity:
While applying AI, it is important to analyse benefits for analysing fairness of this action and
this is an important consideration for IS professionals.
Benefits of this action:

3MORAL DILEMMA ANALYSIS OF AI APPLICATION IN INSURANCE
1. for organizations:
 Short Term: Automates decision regarding health insurance claim and payment
adjustment
 Medium/ Long Term : create a strong portfolio in the market with competitive and
strategic advantage over traditional insurance provider
2. for individuals:
 Short Term: Increase their workflow through automation
 Medium/ Long Term : Opportunities for growth as company grow
3. for business clients:
 Short Term: Reduction in fraud regarding insurance claim
4. for industry:
 Medium/ Long Term : Allows innovation in the industry
Harm caused by this action
 Medium/ Long Term : if data stored for providing service is stolen company have to deal
with legal consequences and legal actions
 Short Term: Data might be hacked
 Medium/ Long Term: employees might be too much dependent on technology and might
affect their skills and productivity as well. Automation might reduce human workforce as
well.
 Medium/ Long Term : might not get insurance when required
 Short Term: No harms for the public
 Medium/ Long Term : Traditional insurance providers will increased competition which
might result in reduction in insurance companies