Microsoft’s $7.5 billion AI push heightens pressure on insurers amid rising model risks

Canada’s AI race is accelerating at a pace the insurance sector may not be ready for. This week, Microsoft announced a “landmark” $7.5 billion investment to rapidly expand the country’s artificial intelligence capacity over the next two years – bringing its total planned AI spending in Canada between 2023 and 2027 to $19 billion.

It’s the kind of blockbuster investment that shows how quickly advanced AI is scaling across the economy. But as the technology surges forward, so do the risks – raising urgent questions about whether insurers can keep up with the speed, complexity and systemic exposure that comes with it.

AI is already reshaping underwriting, pricing and claims. But the question of whether the insurance sector is truly ready for the risks that accompany the technology remains o