Abstract: The integration of artificial intelligence (AI) within the insurance industry raises concerns that insurance companies might use the technology to unfairly curtail or deny policyholders’ claims. Drawing on the historical example of the Colossus software, this article outlines the potential consequences of diminished human oversight in AI-driven claims handling. In the past, technology was used to boost insurance companies’ bottom lines while undervaluing policyholders’ claims. We may be seeing a similar situation unfold in real time with recent investigations into and lawsuits against certain health insurance companies for their alleged algorithm-driven claim denials. This article highlights the need for watchdogs and regulators to demand that AI tools under development afford “explainability” and protect policyholder rights. Insurance companies must stand by their fundamental duty of good faith to policyholders, and courts must maintain long-standing precedent that demands “decency and humanity” in insurance company claims operations.

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