AI in Insurance
Only 12% of Insurers Are Cashing In on A.I., but They Are Pulling Far Ahead
High-return insurers embed A.I. directly into claims, fraud and underwriting workflows rather than treating it as a standalone tool, the IBM Institute for Business Value found.
Just 12% of insurers have embedded A.I. across core operations, adopted it at scale and generated consistently high returns, while the rest remain stuck in disconnected pilots or broad experimentation without matching business impact, according to the IBM Institute for Business Value. Among this top tier, 69% report extensive A.I. use in fraud investigation, compared with just 21% of other insurers.
The findings come from a survey of 800 senior insurance executives across 31 geographies, alongside a consumer survey of 10,000 insurance customers across 17 geographies. Overall, the share of insurance A.I. projects delivering positive ROI reached 35% in 2025, and executives project that figure will climb to 45% in 2026 and 60% by 2029. Among the highest-performing insurers specifically, more than half of A.I. projects are expected to deliver positive returns in 2026.
Why AI readiness in insurance starts with data governance
AI is capturing attention across the insurance industry, with organizations exploring how it can improve underwriting, accelerate claims processing, strengthen risk management, and enhance customer service.
Yet many insurers face the same challenge: fragmented data, scattered across policy, claims, exposure, finance, compliance, and operational systems. Before organizations can realize the promise of AI, they must first establish a trusted and governed data foundation.
The reality is that many insurers spend more time reconciling data than generating insight. Reporting often relies on multiple systems, manual processes, and inconsistent definitions. As a result, critical business decisions can be delayed by questions surrounding data quality, ownership, lineage, and trust. In this environment, AI does not solve existing data issues; instead, it can amplify them. Faster access to unreliable information simply leads to faster delivery of unreliable insights. MORE
Faster claims, higher stakes: Why human judgment matters more than ever
Customers are losing patience with the claims process and understandably so. When a home is damaged, a vehicle is out of service or a business is interrupted, policyholders want answers. They want to know what is covered, what happens next and when they can expect a resolution.
Insurers are responding with investments in artificial intelligence designed to accelerate claims handling, reduce administrative work and improve efficiency. AI can review documentation, identify missing information, summarize complex files and help claims organizations respond faster.
But there is a risk in making speed the primary measure of success.
A claim denied in minutes rather than days is not necessarily a better outcome. Neither is a settlement that moves quickly but overlooks a coverage issue, underestimates damages or misses circumstances an experienced adjuster would recognize.
News
Global Reinsurance Capital Reaches Record $688 Billion as Insurtech Opportunities Expand
Global reinsurance capital reached a record $688 billion in the first half of 2026, creating opportunities for insurtech companies as insurance rates soften, according to Beinsure, citing Gallagher Re data.
Dedicated reinsurance capital increased 11% to $648 billion at year-end 2025 before rising another 5% during the first half of 2026. The expansion reflects increases in traditional reinsurance capital and insurance-linked securities. Meanwhile, Gallagher Re reported a 19.3% return on equity for its global reinsurance composite. Property catastrophe pricing declined globally, with loss-free U.S. programs seeing reductions of up to 25%. Cyber aggregate excess-of-loss contracts also experienced reductions of up to 32%.
Financial Results
Munich Re raises profit target as L&H growth offsets P&C softening
Munich Re raised its full-year profit target to €6.6 billion after posting a nine-month net result of €5.667 billion, but the more revealing detail in the final quarterly statement is where the earnings came from. Property-casualty reinsurance delivered a combined ratio of 80.0% in Q3, still inside guidance, but the life and health segment grew insurance revenue by 31% year-on-year in the quarter and produced a technical result of €493 million. The result for the period reflects two distinct engines.
The P&C result needs context. Major losses in Q3 came in at €646 million, equating to 14.9% of net insurance revenue against an 18% budget. That is a favorable variance, but not the exceptionally low loss experience that drove Q3 2025’s combined ratio to 62.7%.
Munich Re’s statement attributes the year-on-year decline in the quarterly net result, from €1.997 billion to €1.742 billion, to Q3 2025’s “exceptionally low” major-loss expenditure. The El Choco earthquake in Colombia was the costliest natural catastrophe of the quarter at approximately €0.3 billion. The underlying P&C business performed in line with its own targets.
Climate/Resilience/Sustainability
Policy Disconnects, Deferred Mitigation Escalate Weather-Related Claims
The property/casualty insurance industry is operating under unprecedented environmental and financial pressure as the impacts of extreme weather events compound.
According to the NOAA (National Oceanic and Atmospheric Administration), the U.S. sustained 24 climate disasters where the damages exceeded $1 billion in the first 10 months of 2025. This same trajectory has been carried directly into 2026. In January, Winter Storm Fern blasted the country, leaving an estimated $4 billion to $6.7 billion in insured losses and instantly cementing its place as one of the costliest winter weather events since 1950, Carrier Management reported
Research
The future of insurance 2035 | Deloitte
Future of Insurance 2035: Deloitte maps five shifts: distribution, products, engagement, operations, and ecosystems, helping insurers build resilience to drive growth
By 2035, value will move beyond traditional risk transfer towards prevention, resilience, and long‑term financial security. While the sector has remained resilient in recent years, the road ahead is expected to be more challenging as industry megatrends accelerate and intensify. The convergence of these megatrends means that their impact can no longer be looked at in isolation and winning will require the ability to anticipate disruption, adapt quickly, and align offerings to the future needs of individuals, businesses, and societies navigating unprecedented uncertainty across the future of insurance.
- Sales and distribution: Shifting from transactional sales to “always on”, data‑driven advice.
- Products and pricing: Evolving from protection products to outcome‑orientated solutions that expand profit pools.
- Customer engagement: Moving from reactive interactions to proactive, personalised experiences.
- Operations: Reimagining insurance operations through emerging technology and AI.
- Strategic collaborations and M&A: Accelerating innovation and value expansion through ecosystem collaborators.
LexisNexis Insurance Demand Meter – Trends from Q3 2026
- Shopping volumes sustained record levels, while policy shopping and new business growth remained positive but continued to decelerate
- New business growth outpaced policy shopping growth, potentially signaling a shift in how policyholders approach shopping
- For the second consecutive quarter, exclusive distribution channel growth outpaced the direct and independent channels
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