TLDR: Aon’s Kevin Kalinich advocates for a comprehensive national AI policy to address the rapidly evolving risk landscape, ensuring the continued insurability of AI-related exposures and fostering responsible innovation.
Aon, a leading global professional services firm, is calling for a unified, national policy framework to regulate artificial intelligence, emphasizing the critical need to ensure insurability and effective risk management as AI technologies rapidly advance. Kevin Kalinich, Aon’s Intangible Assets Global Collaboration Leader, delivered this message during a testimony before a government committee on July 30, 2025. Kalinich highlighted that while AI is undeniably enhancing productivity, decision-making, and customer engagement across various sectors, it also presents a dynamic and fluid risk landscape.
The emerging risks associated with AI are diverse and significant, including large language model hallucinations, AI-driven cyber attacks, deepfakes, intellectual property infringement, data leakage, ‘AI Washing,’ and robotic faults. The urgency for such a policy is underscored by data from Stanford’s 2025 AI Index Report, which indicates a 56% year-over-year increase in AI-related incidents. Furthermore, OpenAI CEO Sam Altman has cautioned the Federal Reserve about AI’s potential to disrupt labor markets and economic stability at an unprecedented pace, likening the scale of upheaval to globalization compressed into months rather than decades.
Kalinich stressed that these concerns extend beyond macroeconomic stability to directly impact insurability. Traditional insurance models rely on uncorrelated, diversifiable risk pools and predictive loss modeling. However, if AI-induced disruptions become systemic, leading to widespread job losses, capital market volatility, and cascading liability claims, insurers could face unquantifiable aggregate exposures. These correlated risks are challenging to price, underwrite, and reinsure using existing structures, mirroring the early challenges faced in the development of cyber-insurance.
To mitigate these challenges, Aon proposes a coordinated, whole-of-government approach to AI regulation. The firm advocates for public policies that establish clear liability frameworks, maintain viable insurance markets, and empower both AI developers and end-users to operate with confidence. Aon encourages lawmakers to create a national, principles-based framework for AI regulation and supports insurance innovation through model legislation at the state level or via regulatory sandboxes. This approach aims to help companies establish minimum risk governance baselines, such as inventorying AI tools, assigning ownership, auditing performance, and promoting transparency in model inputs and outputs for effective underwriting and regulatory supervision.
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While some cutting-edge insurance carriers have begun offering AI-specific insurance protection, the limits are often insufficient for larger clients. Aon believes that with appropriate guardrails, AI can unlock unprecedented value for humanity, enhancing resilience, accelerating innovation, and improving outcomes across industries. The firm is committed to collaborating with clients, regulators, and policymakers to ensure AI becomes a transformative and trustworthy force for good.
