Hidden AI exposure could leave insurers facing growing accumulation risk, warns KYND

Insurers could be unknowingly building 'silent AI' exposure across their portfolios as businesses adopt AI faster than they disclose it, warns cyber risk intelligence provider KYND.

While the insurance market continues to debate how AI should be covered, KYND’s latest white paper, The Wild West of AI Risk, finds that the more immediate challenge is the lack of AI visibility.

Insurance runs on disclosure of clients’ use of AI, but organisations are adopting AI faster than they are declaring it. That means AI use may go unseen at the point of underwriting, however thorough the process, and exposure can quietly build across a portfolio into accumulation risk.

Aaron Aanenson, head of insurance, North America, at KYND, said: “Many organisations are embedding AI into everyday business processes, but that isn't always being reflected in underwriting conversations.

“Rather than focusing solely on where AI should sit within policy wordings, insurers should be prioritising visibility of AI adoption across their portfolios. AI-related claims are already emerging, so understanding those exposures before claims materialise will be critical to assessing and pricing risk effectively.

“Without that visibility, insurers risk hidden accumulation exposure, particularly where multiple policyholders rely on the same underlying AI platform or model. Identifying those concentrations early will be key to building more resilient portfolios.”

With 77% of organisations now using ChatGPT [1], KYND argues the industry risks repeating the experience of ‘silent cyber’, where exposures accumulated inside policies long before insurers fully understood or priced them.

The white paper shows how AI-related claims are no longer a concern to be dealt with in the future. Disputes are already emerging around issues such as inaccurate outputs, copyright infringement and bias, but limited historical claims data means insurers still face significant uncertainty when assessing how AI exposure could develop over time.

A spokesperson from a specialist cyber MGA said: “I think the only thing the industry is keeping up on is excluding AI from areas it doesn't want exposure to. In the US, you've seen a lot of general liability and ISO forms introducing AI exclusions – very similar to what they did when cyber became a thing, taking general liability off the table.

“Where we haven't quite settled is in the E&O and cyber space: how it fits, what would actually be triggered.”

Read KYND’s white paper, The Wild West of AI Risk, here: https://support.kynd.io/ai-risk

For more information, please visit www.kynd.io.

[1] Netskope, Cloud and Threat Report: 2026, https://www.netskope.com/resources/cloud-and-threat-reports/cloud-and-threat-report-2026

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Editors notes

About KYND

KYND is a pioneering cyber risk analytics platform that transforms complex data into clear, actionable insight. Built for the insurance market, it supports confident decision-making across underwriting and portfolio management, with particular strength in small and medium-sized enterprise risk.

With 100% coverage of the SME sector – and visibility into any organisation with a URL – KYND enables insurers to assess risks others often miss. Its flexible, tailored product suite delivers jargon-free insights, combining intuitive tools with expert support.

Headquartered in London with offices in Portugal and the US, KYND is available in 15 languages and provides instant visibility into cyber exposure, continuous monitoring and real-time threat alerts – helping clients stay ahead of evolving threats.

Founded in 2018, KYND has been recognised in the InsurTech 100 list for four years running and scooped Cyber Product of the Year at the National Insurance Awards 2025.

For more information, please visit: https://www.kynd.io/

Follow KYND on LinkedIn: @KYNDCyber