Emerging Risks to Watch: Agentic AI, Electric Motorcycles, and Hydrogen Fuel Cells

The race to leverage the immense potential of AI has certainly created extraordinary opportunities and enhanced capabilities for organizations, but it also comes with risks and profound responsibility.

While this rapidly advancing technology is improving productivity and efficiency, it has understandably raised some public concerns over its appropriate place at work and in our lives. How we live, work, and even move around seems to be constantly changing as innovations reshape expectations, redefine industries, and challenge long-standing assumptions.

As we navigate this dynamic landscape, we explore three key risks and their potential implications for insurers.

Rise of the AI Agent

Automation has typically lent itself to work that entails clearly defined and repetitive steps. But AI agents, or agentic AI, are (in theory) changing that. These autonomous AI systems are built from large language models and are designed to automate various enterprise or organizational tasks. Unlike some GenAI chatbots, agents may not need multiple prompts to accomplish a goal: They may be given a single prompt and then attempt to arrive at a solution themselves.

When we consider the potential for AI to augment and automate human labor, agents often loom large in that discussion. AI agents may offer a variety of capabilities, including the ability to access the internet and manipulate web browsers; write and execute code; coordinate with other AI agents; and even strategize, decide, and act–what’s known as “goal decomposition.”

Survey research suggests that a growing number of industries are either experimenting with or implementing AI agents across various business functions, from customer service and marketing to corporate strategy and human resources.

While these AI innovations may prove beneficial for many businesses in the years ahead, several questions remain about the risk management protocols being implemented by companies adopting such agentic large language models, and whether such advanced AI systems may be vulnerable to increasingly sophisticated forms of cyberattack. For insurers, there may be exposure in errors and omissions, cyber liability, and product liability concerning AI agents.

The Emerging Electric Transport Mode

While electrified motorcycles are a niche market in the United States, globally, they are far more common. In 2021, for instance, more than 10 million electric two-wheelers were sold or registered globally, and an international automaker aims to sell 4 million electric motorcycles annually by 2030 and to make all its motorcycle brands carbon-neutral by the 2040s.

Enthusiasts say electric motorcycles are quieter, produce less air pollution, and are easier to maintain than motorcycles with internal combustion engines. Of course, they also come with lower fuel costs. On the other hand, critics point out the high upfront cost of electric motorcycles as well as their limited mileage range, which is a particularly difficult challenge for riders in the U.S., where EV charging stations are lacking and metropolises are sprawling.

Electric motorcycles typically generate more horsepower than their combustible engine counterparts and feature immediate, maximum torque typical of electric motors in general. This translates to faster acceleration, likely altering their risk profile compared to traditional motorcycles. And because they are relatively novel, electrified motorcycles may present greater exposure to theft as well as face issues with the availability of replacement parts should they require repair following a covered loss.

Fire risks associated with lithium-ion batteries used in modern electric motorcycles must also be taken into consideration. As we’ve come to understand with EVs, lithium-ion battery fires often burn hotter than combustion engine fires, may reignite after they’ve been doused, and can leak toxic chemicals and fumes. But unlike EVs, motorcycles may not offer the same degree of physical protection against battery intrusion during a vehicular accident.

Price and maintenance may prove the most prohibitive for automakers looking to break through the motorcycle market in the U.S. For example, electric motorcycles tend to cost several thousand dollars more on average than a traditional motorcycle. At least one global automaker has committed to reversing this trend, aiming to bring the total cost of owning an electric motorcycle in line with that of an internal combustible engine model in three years.

Hydrogen on the Horizon

The U.S. produces approximately 10 million metric tons of hydrogen each year, though largely for oil refinement and fertilizer production. Recent advancements in hydrogen fuel cell technology have, however, made this readily available element an appealing alternative energy option, holding the potential to power everything from automobiles to freight trains.

These electrochemical devices that convert hydrogen and oxygen into water, heat, and–crucially–electricity can be found in use across a variety of industries, powering commercial forklifts and personal vehicles in the California market.

Fuel cell electric vehicles (FCEV) have an EPA-estimated range between 300 and 400 miles and feature high-pressure hydrogen tanks that supply a fuel cell stack, where hydrogen reacts with oxygen to generate electricity.

The upfront cost of these vehicles, coupled with the current lack of a reliable hydrogen fuel infrastructure, has made the scalability of these vehicles more difficult than that of battery-powered electric vehicles. Additionally, hydrogen is highly flammable, raising concerns about potential fire risks if it is used in personal vehicles, for example.

These three technological trends represent evolving exposures for insurers. Agentic AI introduces new dimensions of cyber liability and operational risk, while electrified mobility and hydrogen fuel solutions raise questions around product safety, fire risk, infrastructure reliability, and long-tail liability. Insurers will need to deepen their understanding of these risks and analyze how they will impact their business.

Topics Trends InsurTech Auto Data Driven Agencies Artificial Intelligence