Latest news with #Lloyds-backed
The Star
20-05-2025
- Business
- The Star
Artificial intelligence insurance? This startup in Canada will cover the costs of AI mistakes
Armilla cited a 2024 incident where Air Canada was using an AI chatbot as part of its customer service system, and the AI completely fabricated a discount which it offered to customers – a judge then ruled that the airline had to honour the offer. — Reuters Lloyds of London, acting through a Toronto-based startup called Armilla, has begun to offer a new type of insurance cover to companies for the artificial intelligence era: Its new policy can help cover against losses caused by AI. While Lloyds, and its partner, are simply capitalising on the AI trend – in the same way they'd insure against other new phenomena, in an effort to drive their own revenues – the move is a reminder that AI is both powerful and still a potential business risk. And if you thought adopting AI tools would help you push down the cost of operating your business, the advent of this policy is also a reminder that you need to check if AI use might actually bump some of your costs (like insurance) up. Armilla's policy is intended to help offset the cost of lawsuits against a particular company if it's sued by, say, a customer or a third party claiming harm thanks to an AI product, the Financial Times noted. The idea is to cover costs that could include payouts related to AI-caused damages and legal fees associated with any such lawsuit. Armilla's CEO told the newspaper that the new insurance product may have an upside beyond protecting companies against certain AI losses. Karthik Ramakrishnan said he thinks it could even boost AI adoption rates because some outfits are reluctant to embrace the innovative new technology over fears that tools like chatbots will malfunction. Armilla cited a 2024 incident where Air Canada was using an AI chatbot as part of its customer service system, and the AI completely fabricated a discount which it offered to customers – a judge then ruled that the airline had to honour the offer. The Lloyds-backed insurance policy would likely have offset some of these losses had the chatbot been deemed to have underperformed. But it's not a blanket policy, the FT noted, and the company wouldn't offer to cover risky or error-prone AIs – like any insurer wary of covering a 'lemon.' Ramakrishnan explained the policy is offered once an AI model is assessed and the company is 'comfortable with its probability of degradation,' and then will only pay out compensation if the 'models degrade.' The FT also noted that some other insurers already build in cover for certain AI-connected losses as part of broader technology error policies, though these may include much more limited payouts than for other tech-related issues. The consequences of a company acting on hallucinated information from an AI, where an AI just makes up a fake answer but tries to pass it off as truth, can be severe, 'leading to flawed decisions, financial losses, and damage to a company's reputation,' says industry news site PYMNTS. The outlet also noted that there are serious questions of accountability that may arise when an AI is responsible for this kind of error. This sentiment echoes the warnings made by MJ Jiang, chief strategy officer at New York-based small business lending platform Credibly. In a recent interview with Inc, Jiang said that companies are at risk of serious legal consequences from AI hallucination-based errors, because you 'cannot eliminate, only mitigate, hallucinations.' Companies using the tech should ask themselves who will get sued when an error is made by an AI? Jiang said they should have mitigation procedures in place to prevent such errors in the first place. In fact, she thinks that ' because GenAI cannot explain to you how it came up with the output, human governance will be essential in businesses where the use cases are of higher risk to the business.' Other business experts have also warned that using AI is not a risk-free endeavor and have issued guidance on how to prepare businesses for AI compliance and any subsequent legal issues. Keeping these issues in mind when preparing your AI budget is a good idea. – Inc./Tribune News Service
Yahoo
25-04-2025
- Business
- Yahoo
Ultimate Finance boosts Lloyds-backed asset finance facility to £145m
Specialist asset-based lender Ultimate Finance has increased its asset finance securitisation facility with Lloyds Bank from £100m to £145m, according to a press release. The expansion follows a strong start to 2025, with origination growth accelerating in the first quarter and continued expansion of the lender's asset finance loan book. In the first 15 weeks of the year, Ultimate Finance provided £32m in new asset finance facilities to UK businesses through hire purchase, finance lease and refinance products. The company reported a 70% year-on-year increase in origination for Q1, with loan book balances exceeding £120m for the first time. Neil McMyn, Chief Financial Officer of Ultimate Finance, said the increase reflects strong demand and ongoing support from introducers and broker networks. 'The facility increase further extends the long-standing relationship we have with Lloyds and our ability to provide even more funding and investment capital to SMEs throughout the UK,' he said. Andrew Scott, Director at Lloyds, said the bank is committed to supporting the SME sector through securitised funding. 'We are proud not only to provide this additional funding to Ultimate Finance, but also to support the company as it continues to deliver on its growth ambitions,' he said. The announcement follows Ultimate Finance's £370m wholesale funding raise in 2024 across its working capital, asset finance and bridging finance products, the company said in a press release. The lender is part of the Tavistock Group, a private investment company. "Ultimate Finance boosts Lloyds-backed asset finance facility to £145m" was originally created and published by Leasing Life, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Sign in to access your portfolio
