AI in insurance: Navigating regulation across APAC

Asia-Pacific is adopting an innovation-friendly approach to the use of artificial intelligence in insurance, with regulators offering clear, industry-specific AI guidance – despite the absence of a region-wide AI law.

Asia-Pacific has a growing influence on the global insurance landscape, surpassing EMEA not only in market size, but also in growth across several lines. Against this backdrop, insurers are navigating a fast-evolving, but innovation-friendly AI regulatory environment shaped by data protection laws and sector-specific nuances. Regulators are placing increasing emphasis on transparency and explainability, especially for tools used in underwriting, pricing and claims – areas where human oversight is often required for high-impact decisions. Cyber security, operational resilience and data privacy are also central concerns.

While rules apply across all segments – commercial, life and personal lines – the latter are especially exposed to risks associated with high-volume transactions, and real-time AI applications. This is especially evident in motor and home, where underwriting and pricing increasingly rely on behavioural data and telematics. Gallagher Re’s latest Asia Pacific Market Watch report notes broader adoption of AI across auto, medical and home insurance, where primary insurers are collecting and analysing enormous amounts of data and some are developing risk curves and pricing models for new energy vehicles. Life insurers face even stricter expectations, particularly when AI is used in actuarial modelling, longevity prediction, and onboarding. The use of sensitive health data and the long-term consequences of decisions mean that laws similar to GDPR Article 22 come into play, requiring clear explainability and consent protocols. Commercial insurers currently have more flexibility on individual transparency obligations but remain accountable for strong AI governance, auditability and liability, especially in complex lines.

APAC is home to a unique collection of insurance markets, with a diverse AI regulatory landscape, and each jurisdiction adopting specific approaches to balancing innovation and oversight.

South Korea’s insurers are undergoing rapid digitalisation, with many adopting AI to improve product development, service delivery, and operational efficiency. Among the region’s most important and developed insurance markets, South Korea has recently taken steps to consolidate AI-related regulations. The Artificial Intelligence Basic Act, passed in December 2024, provides a legal framework designed to advance national competitiveness in AI, while ensuring ethical standards and public trust. The amended Personal Information Protection Act (2024) grants individuals rights to reject automated decisions and request explanations, enhancing transparency in AI-driven processes. In addition, the establishment of the National Artificial Intelligence Committee in 2024 serves as a central body for AI policy deliberation and coordination across sectors.

Japan meanwhile has introduced non-binding principles to promote the safe and ethical use of AI. The AI Guidelines for Business Version 1.0 (2024) emphasise agile governance, and discussions are underway to establish binding obligations through the proposed Basic Law for Promoting Responsible AI. This seeks to introduce compliance reporting and oversight for developers of significant AI systems.

In Hong Kong, several guidelines have been issued with the goal of aligning AI deployment with data protection laws. The Artificial Intelligence: Model Personal Data Protection Framework (2024) offers practical recommendations for AI deployment, aligning with the Personal Data (Privacy) Ordinance. The Guidance on the Ethical Development of AI (2021) outlines ethical principles for AI development and use, focusing on accountability and transparency. The Ethical Artificial Intelligence Framework (2023), meanwhile, is designed to guide companies more widely in the responsible adoption of AI and big data analytics.

As a major market for insurance, Singapore has established comprehensive guidelines for responsible AI use across the wider financial sector. The Principles to Promote Fairness, Ethics, Accountability and Transparency (FEAT) (2018) provide guardrails for ethical considerations. The Advisory Guidelines on Use of Personal Data in AI Recommendation and Decision Systems (2024) clarify how data protection laws apply to AI systems, offering best practices for compliance. The AI Governance Testing Framework and Toolkit (2022) provides methodologies for assessing AI systems' compliance with ethical principles.

Taiwan takes a notably distinct approach to AI regulation in APAC. Unlike its peers Singapore and China, Taiwan currently lacks binding AI-specific laws, instead relying on voluntary principles and existing data protection frameworks. The draft Basic Law for Development of Artificial Intelligence outlines broad goals but has yet to be enacted – introducing a degree of regulatory uncertainty, especially for cross-border insurers, in the meantime. With no sector-specific AI rules in place, insurers must align with international best practices while preparing for a more structured regime that may emerge as Taiwan’s AI strategy develops.

Despite relatively low insurance penetration compared with more mature markets, China is quite advanced in its AI regulation. Authorities there have introduced a range of binding rules affecting insurers, such as the Algorithm Recommendation Provisions (2022) and Deep Synthesis and Generative AI Measures (2023), which focus on transparency, accountability and public trust. This proactive stance aligns with China’s broader digital ambitions, as insurance uptake continues to grow.

Thailand, another emerging market for insurance, is in the process of developing specific AI regulations. The Office of Insurance Commission (OIC) oversees insurance practices, ensuring compliance with existing laws and promoting ethical standards in AI adoption. Thailand is drafting AI laws inspired by the EU AI Act, with its risk-based approach, voluntary sandboxes and harm compensation mechanisms – with the goal of balancing innovation with consumer protection, and positioning Thailand as a progressive, tech-embracing market.

Global influence

APAC’s approach – focusing on operational guidance over rigid laws – is influencing global thinking on AI in insurance. As its share of global GDP grows, the region’s regulatory models are helping shape emerging global norms, particularly in data governance, explainability and industry-specific oversight. Looking ahead, AI will play an important part in the continued growth of the region’s insurance market.