October 2023

Executive summary

Recent applications of AI (Artificial Intelligence) technology offers room for optimism and equally a message of caution. As the pace of generative AI evolution outstrips the policymaker and regulator, the question is whether regulation can realistically implement effective risk controls outside of commercial application, and where the legislative process takes over.

Exploring the case for AI regulation versus a 'guardrails with flexibility' alternative, this report puts forward a range of risks, opportunities and anticipated challenges to introducing broad-scale regulation that requires close cooperation between international regulators and jurisdictions.

Regulators will rely on proactive discussion and industry-wide collaboration to develop an AI framework that takes into consideration international perspectives and current thinking while providing a supportive space for research, discovery and innovation. With growing concerns being raised by big-tech firms, policy makers and risk specialists across the globe, the full scope of AIs application remains an open brief.


  • Predicting the future AI landscape, and how and where regulatory guardrails will enable big tech to grow in a risk-controlled environment, is challenging. Amidst growing calls for clarity on AI's potential misuse, understanding complex technology and weighing up the pros and cons of multiple use cases is a significant hurdle for the regulator.
  • International operators looking to capitalize on AI innovation at scale may hit the challenge of navigating inconsistent regulation across borders, increasing development and implementation costs while hampering efficient time-to-market gains. In some cases, the scope of the AI application may render it inoperable in some countries due to regulatory constraints.
  • While regulatory review continues at pace in Europe, the UK, and China, industry-wide concerns and risk exposure created by the application of AI is being explored in the US and other major markets internationally.
  • With the majority of breakthrough generative AI models originating from the US, concerns persist and public confidence varies on how AI will be used, leading to growing calls for tighter safeguards against unethical practice, misinformation and weaponization.

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CONDITIONS AND LIMITATIONS Gallagher's global operations, including a network of correspondent brokers and consultants, offers client-service capabilities in more than 130 countries around the world. This report and supporting information is not intended to provide legal or financial advice and reflects our understanding as of October 2023. It should not be regarded as a comprehensive statement of the law and/or market practice in the regions covered. You should not act upon information in this publication nor determine not to act, without first seeking specific legal and/or specialist insurance and risk management expertise. Should you require advice about your specific insurance arrangements or claim circumstances, please contact your Gallagher account representative.

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