The US government will use AI to predict which insurance companies will fail

The US government is buying software that uses predictive modeling to assess the financial health of insurance companies that do not have public credit ratings. This means the government can now identify potential risks from smaller, less transparent insurers before they become a problem.

Insurance companies without public ratings are often smaller or specialized, and their financial stability can be harder to track. This new tool allows regulators to monitor a broader range of insurers, potentially preventing unexpected failures. It shifts the burden of risk assessment from manual review to automated prediction, making oversight more scalable.