Lloyd’s of London-backed start-up Testudo has launched an innovative data and technology platform designed specifically to underwrite insurance policies for risks emerging from artificial intelligence deployments. Operating as part of Lloyd’s Lab innovation accelerator’s 14th cohort, Testudo's platform addresses the growing need for specialised insurance products amid the rapidly evolving legal and regulatory landscape of AI.

Incubated through a variety of legal and enterprise accelerators, and supported by prominent investors such as LocalGlobe and Goldman Sachs partners, Testudo aggregates and analyses real-time data on AI-related litigation, regulatory developments, and incidents. This comprehensive data compilation allows insurers and businesses to better identify and quantify risks that traditional underwriting might overlook. Crucially, Testudo’s underwriting approach does not require deep integration with clients’ AI systems, enhancing ease of adoption and scalability.

The increased utilisation of generative AI technologies correlates with a significant rise in related legal actions. Data shows that in the first quarter of 2025, generative AI lawsuits rose by 23% compared to the same period in 2024, while filings from January to April 2025 surged 81% year-over-year. States leading in AI litigation include California, Illinois, New York, Texas, and Delaware. Although media attention has often centred on copyright and intellectual property disputes, most common legal claims involve breach of contract, invasion of privacy, and misrepresentation. Key AI applications cited in litigation include customer service bots, marketing content generation tools, and recommendation algorithms.

The frequency of insurers contesting AI-related claims in court has increased, largely because many insurance policies were not originally structured to cover these emerging risks. This gap underscores the market demand for specialised AI insurance products. Industry forecasts suggest the global market for AI-related insurance premiums could reach approximately $4.7 billion annually by 2032.

Testudo plans to introduce new, category-defining insurance products for enterprise clients by late 2025, initially focusing on the U.S. market with backing from Lloyd’s of London. The platform supports risk scoring and reporting tools, giving risk managers, insurers, and brokers enhanced capabilities to detect and assess potential AI liabilities. Its underwriting method incorporates real-world litigation data and actuarial modelling, enabling a dynamic approach to pricing and coverage.

The company has been developed with the support of accelerators including A&O Shearman’s Fuse, Jones Day’s FinAccelerate, and enterprise accelerator Plug and Play. Testudo’s founding team boasts significant experience in both the financial and technological sectors. CEO George Lewin-Smith has led emerging technology adoption at Goldman Sachs across London and San Francisco, while Head of Insurance Mark Titmarsh brings over a decade of expertise underwriting novel and emerging risk products.

Speaking on the platform’s launch, Lewin-Smith emphasised that Testudo’s technology “allows us to understand, price and underwrite real-world artificial intelligence risks, accelerating enterprise adoption with insurance coverage.” Meanwhile, Titmarsh highlighted Testudo’s unique blend of London’s specialist underwriting expertise and advanced technology from the Bay Area as “bridging the AI economy.”

Lloyd’s Chief Commercial Officer and CEO of Lloyd’s Americas, Dawn Miller, expressed confidence in Testudo’s potential impact by stating, “We are proud to support Lloyd’s Lab start-up Testudo with bringing new data and a unique underwriting approach to AI liability insurance to the Lloyd’s market by connecting them with opportunities that address rapidly evolving risks, resulting in new premium generation and measurable operational efficiency gains across the market.” She further noted that fostering such innovation is critical to “building the future resilience of our industry and cementing Lloyd’s position as the world’s leading insurance marketplace.”

The emergence of Testudo marks a significant step in adapting insurance underwriting to the fast-changing AI landscape. However, challenges remain in successfully navigating the complexity of AI technologies and their legal interpretations, which continue to evolve rapidly. Testudo’s approach of combining legal data streams, actuarial insights, and technological innovation will be closely watched as it seeks to influence how AI-related risks are managed and insured in the coming years.

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Source: Noah Wire Services