Despite traditionally risk aversiveness, the insurance industry is fundamentally reshaped by AI.
AI has already become an essential part of the insurance industry, touching on everything from complex risk calculations to the way insurance companies talk to customers. However, eight out of ten companies have soaked their toes in AI water, but similar numbers admit that they are not actually making more money.
Such numbers reveal simple truths. It’s not enough to just buy flashy new technologies. The real winner is someone who understands who they are and how to weave it into all the fabrics they do.
You can see the most dramatic changes at the heart of your business. We handle complaints. A pile of paperwork and endless phone calls is a process that can last for weeks and is ultimately bulldozed by AI.
In 2021, the New York-based insurance company Lemonade deployed, and there was no human input and more than a third of the claim was resolved in just three seconds. Or take a look at the leading US travel insurance companies that process 400,000 claims per year. It has completely turned from a manual system to a 57% automated system, reducing processing time from weeks to just minutes.
However, this isn’t just about moving faster. That’s about getting it right. AI can reduce the costly human error types that lead to up to 30% leaks in the insurance industry. The knock-on effect is a very productive jump that can handle 40-50% of cases. This will stop real experts from becoming paper pushers and start focusing on tricky cases where human touch and true empathy make all the difference.
This is the same for underwriters, people calculating risk. AI gives them superpowers, allowing people to analyze huge amounts of data from all kinds of places, including telematics and credit scores, where people can’t be sifted by themselves. You can also quickly look at past data and policies to draft early risk reports with incredible accuracy.
In reality, this helps to create pricing that is more fair and more accurately reflects a person’s unique situation. Zurich, for example, used the latest platform to build a risk management tool that has 90% accurate ratings.
Suddenly, underwriting was no longer about looking into the rearview mirror. It is a living breathing process that can adapt to new and complex threats such as cyberattacks and the impacts of climate change.
But this isn’t just the magic of the back office. When deployed in the insurance industry, AI is completely changing the conversation between insurers and the people they serve. This allows us to move from simply responding to problems to proactively assisting our customers.
AI chatbots offer 24/7 support and can become smarter with every question you answer. This allows human teams to focus on more difficult conversations. But the real game changer is making things personal.
By understanding customer policies and behavior, AI can gently tweak with update reminders, or suggest products that actually suit their lives, like usage-based car insurance. That’s what you show to the customers who actually get them. It builds the kind of loyalty that is difficult to come in an industry where over 30% of claimants are dissatisfied and 60% blames slow settlements.
This protection instinct is useful for the entire system as well. AI is a great fraud detective in the insurance industry and other areas, and can find strange patterns of data that people miss, and reduce fraud-related losses by up to 40%. It keeps everyone honest and protects the business and its customers.
What fuels the fire of this change? A new kind of low-code platform. They are accelerators, allowing insurers to build and launch new apps and services much faster than before. In a world where customer preferences and rules change overnight, such speed is everything.
The biggest part of such tools is that they place the power to democratize access and innovate in more hands. They allow regular business users (or “citizen developers”) to build the tools they need without having to code geniuses. These platforms often have strong security and controls. This means that this new speed doesn’t need to mean sacrificing safety or compliance. This cannot be negotiated in industries like insurance.
If you retreat and look at the big picture, it’s clear that riding AI is not just a tech project. This is a make-up or break business strategy. Those who jumped early are already pulling away from the pack, seeing what appears to be an increase in customer retention 14% jump and net promoter scores by 48%.
The technology market is expected to explode to more than $14 billion by 2034, with some who believe that AI can add $1.1 trillion in value to the industry each year. However, the biggest obstacle is not technology itself. They are about people and old habits.
Data, especially in industries like insurance, is often stuck in older systems that stop AI from looking at the big picture. To get through this, you need more than just clever software. We need leaders with a clear vision, willingness to change the culture and commitment to training people.
Winners in this new era are not going to tinker with AI in the corner. They will be the one leading from the top with a clear plan to make it a part of the DNA. This requires the understanding that it is not just about making the old things better, but finding a whole new way to bring value and build trust.
July 16th, 2025 at 7pm BST/2pm et. Industry experts from APPIAN and EXL share real-world examples and actionable insights, as well as actionable insights into how leading airlines implement these technologies. Registration is available through the webinar link.
Featured speakers include:
Vikram Machado, Senior Vice President and Practical Leader – Life, Pensions, Retirement & Group Insurance, Exlvikrant Saraswat, Vice President – AI Consulting, Exljack Moroney, Enterprise Account Executive – Insurance and Financial Services, Apian Andrew Kearns, Insurance Industry Leader, Apian Michaela Morari, Senior Solutions Consultant – Insurance Services
See also: Turning AI into finance for the UK and Singapore Form Alliance
