I was rewatching The Godfather last weekend when something clicked. The parallels between running a “family business” like the Corleones and governing #AI in insurance companies are surprisingly strong. Both require strict codes, clear authority structures, and serious consequences for violations.
The insurance industry is at a crossroads with AI. We want the power and efficiency it brings, but without proper governance, we risk creating digital monsters we can’t control. Moreover, with over 24 states adopting NAIC’s AI Model Bulletin to emerging state and federal frameworks, insurers are seeing clear signals: responsible AI isn’t optional—it’s becoming a regulatory expectation
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A CODE YOU LIVE (AND DIE) BY
In the Corleone family, everyone understood the rules. Break them, and you’d find yourself having a very bad day. Similarly, insurance companies need clear, non-negotiable principles for AI deployment.
What I’ve observed working with carriers is that the most successful AI implementations start with governance frameworks that address:
- Data usage boundaries (what customer data is off-limits)
- Decision-making authority (who can approve algorithmic changes)
- Transparency requirements (when and how AI decisions must be explainable)
These aren’t just compliance checkboxes. They’re your organization’s code of honor around AI—principles that guide every implementation decision.
KNOWING WHEN TO CALL A SIT-DOWN
Remember how major Corleone family decisions required a formal meeting of the heads? AI governance needs similar clarity around when to escalate decisions.
The governance frameworks that actually work identify clear triggers for executive involvement:
- When AI touches core underwriting models
- When algorithms make decisions with significant customer impact
- When new AI capabilities might create regulatory concerns
Without these triggers, I’ve watched companies create digital wild wests where tech teams implement AI capabilities without proper oversight, creating massive compliance headaches later. Not to mention, like a proper family meeting, you need representatives from all departements at the table.
CREATING YOUR AI CONSIGLIERE
Every successful organization needs its Tom Hagen—the trusted advisor who sees around corners. For AI governance, this often means creating a cross-functional team that bridges the gap between technology enthusiasm and business reality.
In my experience, effective AI governance teams include:
- Technology leaders who understand capabilities
- Compliance experts who know regulatory boundaries
- Business leaders who can weigh customer and agent impact
These teams become the consiglieri of your AI strategy—helping executives understand when to say “yes” to innovation and when to make offers of refusal.
THE PROTECTION BUSINESS
Let’s be honest—insurance is fundamentally a protection business. We promise security in exchange for premiums. AI governance is ultimately about protecting that core promise.
Without proper oversight, AI can undermine the very trust we work so hard to build with customers. I’ve seen carriers implement seemingly helpful automation that created unintended consequences in claims decisions, creating customer backlash that took years to overcome.
MAKING OFFERS THEY CAN’T REFUSE
The most effective AI governance frameworks don’t just set limitations—they create compelling paths forward. They make the right way the easiest way.
This means designing governance processes that are:
- Clear enough that teams know exactly what’s allowed
- Flexible enough to accommodate innovation and edge use cases
- Strong enough to prevent compliance (and Board) disasters
When governance works well, it doesn’t feel like bureaucracy, it feels like guidance that helps teams implement AI with confidence.
THE QUESTION I’D LOVE YOUR THOUGHTS ON
How is your organization balancing AI innovation with governance? Have you established clear boundaries, or are you still working through what your “family code” should include?
For those still figuring it out, set up a complimentary call to discuss AI governance and the Insurtech ecosystem. Sometimes you need an outside consigliere to help make sense of it all.
Feel free to book a call here.
#AIGovernance #InsuranceInnovation #Insurtech #DigitalTransformation #AIStrategy
Kaenan is a professional in the areas of block chain, telematics, wearables, analytics, artificial intelligence (AI) and Insurtech. He has played a key role in innovating many start-ups and established carriers. His advice has been widely appreciated in the financial community, which resulted in multiple quotes and publications in various media.
Most recently he was Practice Lead for Innovation, Fintech, and Strategic Insights at EY. Throughout his career he has held leading roles within Marketing Strategy and Decision Management with top Insurance, Banking and Finance companies, including USAA, Citibank and Sallie Mae.