Source: Şengün Law

Artificial intelligence (AI) is transforming damage assessment in the insurance sector by automating claims processing, improving accuracy through computer vision and natural language processing, and enhancing fraud detection. However, the integration of AI raises significant legal and ethical challenges, particularly regarding liability when AI errors occur, such as underpayment or delayed claims.

Data privacy and security are critical concerns due to the vast amounts of sensitive customer information processed by AI systems. While Turkey currently lacks comprehensive AI-specific legislation, insurance companies must comply with existing laws including the Turkish Code of Obligations, Personal Data Protection Law, and regulations from supervisory agencies. The European Union’s AI Act, effective since 2024, categorizes AI applications in insurance risk assessment as high-risk, imposing strict transparency, fairness, and human oversight requirements. The US is also advancing regulatory initiatives to ensure ethical AI development. These evolving frameworks aim to balance innovation with protection of customer rights and legal accountability.