AI in Insurance
Insurance customers aren’t seeing the benefits of AI
Insurers must move toward true AI fluency—deeply embedding AI across data, claims processing, customer service and underwriting.
While most insurance companies tout AI deployment in 2025, customers say they’re missing the payoff, according to a Genpact study.
Only 36% of U.S. customers say their digital experience has improved, the data showed, despite 69% of insurance companies having deployed AI.
Where are insurance leaders getting real results with AI?
“There is a major disconnect in the insurance industry,” said Adil Ilyas, global insurance business leader at Genpact.
“While many insurers claim to be using AI, the benefits aren’t reaching customers,” he told PropertyCasualty360. “This mismatch shows that surface-level adoption isn't enough. Insurers must move toward true AI fluency—deeply embedding AI across data, claims processing, customer service and underwriting.”
Other key takeaways… Most respondents have yet to see AI’s full potential: Sixty-two percent of respondents believe competitive advantage will come from greater efficiency in high-volume tasks, while only 30% expect it from high-complexity tasks, and just 8% from using AI for growth or monetization. This suggests that AI capabilities are being underused.
Tech isn’t the biggest AI hurdle: Scaling AI faces challenges beyond technology. At 49%, and unlike past technology waves, governance and oversight are proving to be more significant challenges for insurers. Data privacy at 62% and regulatory differences across jurisdictions at 42% are concerns that exacerbate the problem, creating a landscape where a one-size-fits-all strategy simply doesn’t work. Proofs of concept may succeed in one area but fail elsewhere, requiring insurers to rethink their approaches.
AI meets insurtechs: How firms can close the global protection gap | McKinsey & Company
The insurtech industry is evolving. AI can help pioneering insurers address underinsured areas and better prevent risks.
The insurtech industry has evolved rapidly over the past decade because of technological advancements, changing consumer expectations, and investments. As new risks evolve across climate, cybersecurity, and healthcare, AI has emerged as a critical tool that can modernize insurance processes and offer opportunities to improve efficiency, accuracy, and customer engagement.
In this changing environment, insurtechs can spot gaps that the industry has yet to address and capture the opportunity by incorporating new technologies, especially AI, into their operations.
The insurtech industry is stabilizing
Macroeconomic and geopolitical volatility has affected all industries, but the insurtech industry is showing signs of stabilizing nonetheless. Global venture capital investments in insurtechs have returned to pre-COVID-19 levels ($1.5 billion per quarter), with an increase in funding rounds across various growth stages. However, the market remains divided: While some insurtechs are successfully scaling, others continue to struggle to find sustainable business models.
In this context, the funding landscape has shifted, with a decline in megarounds and a growing focus on smaller-scale late-stage investments. Series C+ funding rounds in particular have seen significant growth, rising from 100 rounds in 2023 to 150 in 2024.MORE
News
Casualty reinsurance sees mixed renewals as commissions stabilize, rates rise – Guy Carpenter
Global insured losses reached nearly US$70 billion in the first half of 2025, according to Guy Carpenter.
Despite ongoing economic volatility, the firm reported that key trends observed during the Jan. 1 renewals have persisted into mid-year, including strong reinsurer capital positions, increasing capacity in the property market, sustained pricing moderation, and disciplined casualty underwriting.
The second quarter saw a slowdown in insured losses compared to the first quarter. Total losses in the first six months of 2025 are now aligned with the inflation-adjusted five-year average.
A significant driver was the Los Angeles wildfires, which generated US$40 billion in insured losses, accounting for 59% of total first-half activity. These losses are not expected to materially affect reinsurer capital or dampen appetite for the remainder of the year.
Reinsurer returns on equity stood at 16% in 2024 and are forecasted to reach 15% in 2025. Total reinsurance capital ended 2024 at a record US$607 billion. Guy Carpenter anticipates capital growth of between 5% and 7% by the end of 2025.
Commissioner Lara appoints members to new Smoke Claims and Remediation Task Force
[Ed. note: The task force will need to wrestle homeowner policy language and intent of coverage in relation to health and safety objectives. CA already has some of the highest claim practice standards when it comes to testing for mold, lead and asbestos following property damages. Balancing claim costs, repair delays and other implications should challenge the Task Force]
In response to the smoke damage caused by wildfires across California, including the recent Palisades and Eaton fires, Insurance Commissioner Ricardo Lara has appointed members to his new Smoke Claims and Remediation Task Force. Led by the California Department of Insurance, the Task Force includes state and local public health experts, fire safety experts, smoke remediation specialists, industrial hygienists, consumer advocates, and representatives from the insurance industry.
Together, they will recommend science-based insurance standards and best practices for safely returning to and restoring homes and personal property.
“Wildfire smoke is fundamentally a health and safety issue that must be addressed by experts who understand the challenges involved. I am entrusting these leaders with recommending where standards are needed and determining which state agencies, beyond my Department, should be involved in their implementation and enforcement,” said Commissioner Lara. “As smoke damage becomes an increasingly critical problem, it requires collaboration among government, businesses, and consumers to find solutions. California must take the lead in creating effective strategies to assist consumers in managing the aftermath of wildfire disasters.”
Research
Rise of High-Cost Insurance Claims Elevate Need to Mitigate Financial Risks, according to QBE North America's Accident & Health Market Report
QBE North America today announced the release of its 2025 Accident & Health Market Report, offering timely analysis of the cost drivers and trends shaping self-funded healthcare plans. Based on proprietary claims data and industry research, the report highlights the growing complexity of healthcare claims, with cancer, circulatory disease and premature births among the most significant contributors to high-cost cases.
"As treatment options grow more advanced and costly, employers are facing rising pressure to control volatility in their self-funded healthcare plans," said Tara Krauss, President of Accident & Health at QBE North America. "Our goal is to equip brokers, administrators and employers with actionable insights to navigate these changes with confidence."
The report shows the frequency of circulatory claims has risen almost 60% post-COVID and neoplasms continue to be the predominant excess loss claim across all deductible levels. Additionally, the severity of preterm birth claims continues to escalate, with some cases reaching close to $4 million in 2024.
Key themes explored in the 2025 report include:
- Increased prevalence of circulatory disease rates post-COVID, particularly among younger patients, is a significant concern
- Emerging high-cost claim trends, including million-dollar claims for cancer, circulatory conditions and pre-term births
- Growing impact of specialty pharmaceuticals and continued strain on patient affordability
- Record-breaking cell and gene therapy approvals, with advanced treatment options for autoimmune diseases and rare genetic conditions
- Societal factors that could be driving the health crisis in America such as antibiotic overuse and processed food consumption
- Legislative challenges to ERISA, as several states introduce bills targeting self-funded health plans
Commentary/Opinion
Auto insurance customer satisfaction in need of improvement: JD Power
The price of automobile insurance has skyrocketed in recent years, with average monthly premiums increasing by more than half since 2019. These rate increases, combined with improving loss ratios, have contributed to auto insurance companies finally reaching profitability after years of instability, with some even recently filing for rate decreases.
Now that profits are up, auto insurers may choose to focus on strategic growth and risk management — but they also need to manage unsatisfied customers, according to the results of the J.D. Power 2025 U.S. Auto Insurance Study.
Per the study, 38% of auto insurance customers are not very satisfied with their insurance companies, meaning they are more likely to shop around for a better provider. Overall satisfaction declined two points year over year to a score of 644 on a 1,000-point scale. Meanwhile, overall satisfaction with auto insurers reached a record 831 points in 2019, according to that year’s J.D. Power study.
“Now that insurers are shifting back into growth mode, they really need to focus on cultivating and keeping high-value customers,” Stephen Crewdson, managing director of insurance business intelligence at J.D. Power, said in a statement. To improve customer satisfaction after the past several years of serious rate increases, “insurers need to focus on delivering a tailored, seamless customer experience across all channels,” Crewdson added.
3 Ways Auto Insurers Can Safeguard Drivers Against Predatory Tows
Insurance regulators recently raised a red flag regarding a surge in towing-related fraud.
In the confusion following a roadside emergency, it’s crucial for drivers to know the safest and most reliable way to get help.
The scenario of a stranded policyholder falling prey to predatory towing practices after experiencing a flat tire or dead battery highlights a critical issue. While the tow industry at large is full of trusted and dedicated professionals, there is a smaller number of individuals who seek to exploit vulnerable situations. These individuals turn minor vehicle troubles into significant and costly problems.
Fortunately, insurers have a valuable tool to protect their policyholders: connecting them with reputable roadside assistance programs that act as a shield against potential fraud.
Steve Medeiros, Vice President, Insurance Market, Agero
Announcements
Travelers Launches Landmark Restoration Campaign to Honor America's 250th Anniversary | Insurtech Insights
Designed to commemorate the upcoming 250th anniversary of the United States, the program will restore four historic landmarks across California, Connecticut, Louisiana, and Minnesota – each chosen for its cultural significance and vulnerability to natural disasters.
As part of the initiative, Travelers will contribute $1 million in grants to support restoration efforts, while also strengthening the long-term resilience of the surrounding communities. The project will feature on-site programming, community events, and service opportunities for Travelers employees, local organizations, and residents.
“Travelers Across America is an expression of our enduring optimism in the American story – past, present and future,” said Alan Schnitzer, Chairman and CEO of Travelers. “By investing in the restoration and resilience of historic landmarks, we are honoring our country’s history, as well as the spirit of service and innovation that will carry us forward.”
The selected landmarks—though diverse in history and geography – share a common thread: exposure to increasing climate-related risks. The initiative seeks to raise awareness not only of historical preservation, but also of the importance of insurance access and affordability in supporting healthy, resilient communities.
InsurTech/M&A/Finance💰/Collaboration
Guidewire Accelerates P&C Insurance Innovation, Launching Marketplace Reviews as Downloads Soar
Guidewire (NYSE: GWRE) announced that Guidewire Marketplace has surpassed 20,000 partner integration downloads, with 32% growth year over year, and introduced functionality enabling Guidewire customers to leave ratings and reviews on Marketplace integrations.
Guidewire Marketplace has achieved 20,000 downloads of partner-developed integrations, a milestone that demonstrates the value and interest of P&C insurers in a robust, open ecosystem of insurance technology innovation. With more than 290 integrations, Guidewire Marketplace is the largest integration ecosystem in P&C insurance, providing on-demand access to hundreds of solutions that address Guidewire customers’ common business challenges.
Guidewire Marketplace has also added rating and reviewing functionality, enabling customers to share valuable insights on integrations. This new feature empowers customers to make more informed decisions based on real experiences, while allowing Guidewire partners to receive valuable feedback that drives continuous improvement of their solutions.
“Guidewire PartnerConnect delivers the solutions P&C insurers trust to drive engagement, innovation, and efficient growth within their businesses, as evidenced by this exciting 20,000 partner integration downloads milestone,” said Will Murphy, Vice President, Marketplace and Technology Alliances, Guidewire. “The addition of ratings and reviews to Guidewire Marketplace marks another step forward in our commitment to ensuring a reliable and transparent Marketplace - one that leverages community experience to promote integration excellence and foster trust.”
New integrations are consistently being added to the Guidewire Marketplace. The following Consulting and Technology partners published new integrations and content to the Guidewire Marketplace in the third quarter of Guidewire fiscal year 2025: Aspire Systems, Capgemini, CCC Intelligent Solutions, Centre for Study of Insurance Operations, CSG Systems, ECHO, Indico Data, Mitchell, One Inc, OpenText, PwC, and Risk Control Technologies.
MAPFRE RE partners with ICEYE for global flood data - Reinsurance News
Global reinsurer MAPFRE RE has entered into an agreement with ICEYE, an specialist in satellite-based disaster management solutions, to license its Flood Insights data globally.
This collaboration aims to improve MAPFRE RE’s rapid and effective response to natural catastrophes.
This will be achieved thanks to ICEYE’s near real-time flood data, which will be integrated into MAPFRE RE’s existing catastrophe event response framework.
Reinsurers will gain access to this high-resolution damage information, this will allow them to rapidly estimate losses and gain immediate situational awareness of financial impacts across its reinsurance portfolios. The data will also support critical communication with key stakeholders as the event unfolds.
ICEYE’s synthetic aperture radar (SAR) satellite constellation provides detailed flood extent and building-level inundation data globally, often within hours of an event.
Nationwide Completes Acquisition of Allstate Employer Stop Loss Business for $1.25 billion
Nationwide, one of the largest providers of insurance and financial services products in the U.S., has completed the acquisition of The Allstate Corporation’s employer stop loss segment for $1.25 billion. The transaction closed in accordance with the terms of the agreement executed on Jan. 30, 2025.
“This acquisition expands the capabilities, specialized expertise and strong partnerships of our financial services organization, positioning our company as a leading provider in the employer stop loss industry,” said Nationwide CEO Kirt Walker. “As a company committed to protecting people, businesses and futures with extraordinary care, enhancing our employer stop loss segment helps us continue to meet the needs of business owners today and into the future.”
The transaction further strengthens and diversifies Nationwide’s portfolio, expanding the company’s ability to sell stop loss insurance to small businesses. Stop loss insurance protects employers who self-fund their health insurance plans from excess losses.
As part of the acquisition, Lindsey Murray, the former chief operating officer of Allstate Health, has joined Nationwide and will lead the newly formed Nationwide Group Benefits segment. Murray will report to John Carter, president and COO of Nationwide Financial.
“Lindsey brings a wealth of experience and a proven history of success in the employee benefits market,” Carter said. “Her expertise builds on and complements Nationwide’s core capabilities, helping us drive continued growth as we navigate the evolving financial landscape.”
Claims
Outdated Infrastructure Delays Insurance Claims | Insurance Thought Leadership
Our latest research, based on insights from over 200 senior insurance professionals in the U.S. and U.K., uncovered a clear pattern: The financial infrastructure that supports claims fund management remains fragmented. This disconnect not only delays payments but also creates operational risks and undermines trust.
The numbers tell the story. Nearly 80% of respondents cited internal process complexity as a key barrier to faster payments. 66% reported struggling to access readily available funds, a challenge that climbs to 74% in the U.S., where decentralized funding structures and manual approval flows persist. Only 1% of insurers said collaboration between claims and finance teams is "highly effective," underscoring how siloed operations remain.
All these responses represent a strategic challenge for insurers striving to stay competitive in a fast-evolving market.
THE HIDDEN COSTS OF FRAGMENTATION
At the heart of the issue is a lack of real-time financial coordination. Claims, finance, and treasury teams often operate in silos, using separate systems that don't talk to each other. This makes it nearly impossible to track the status of funds, forecast liquidity needs, or reconcile payments without time-consuming manual intervention.
For U.S. insurers, the stakes are especially high. Our research shows that U.S.-based treasury teams are more focused on governance and compliance (37%) than their U.K. counterparts (22%), a reflection of heightened regulatory scrutiny and complex operating environments. Despite this focus, many still struggle with fragmented systems that leave them exposed to delays, errors, and compliance risks. ARTICLE
Curt Hess is the U.S. executive president at Vitesse
People
Triple-I Appoints Patrick Schmid Chief Insurance Officer; Will Also Lead Catastrophe Resiliency Council and Insurance Research Council
The Insurance Information Institute (Triple-I), an affiliate of The Institutes, announced today Patrick Schmid has been appointed chief insurance officer at Triple-I, effective July 11, 2025.
“We are fortunate to have a strong succession plan in place with Pat, and his deep understanding of strategy, risk management and collaborative innovation make him an excellent fit for this expanded leadership role at Triple-I and IRC.”
In addition, Schmid will lead the organization’s Catastrophe Resiliency Council and the Insurance Research Council, reporting to Triple-I CEO Sean Kevelighan. Schmid will also continue in his role as president of The Institutes’ RiskStream Collaborative, reporting to Pete Miller, president and CEO at The Institutes. He is replacing Dale Porfilio as Triple-I’s chief insurance officer and president of IRC.
“After four years of dedicated service, Dale has decided to pursue new opportunities. We are grateful for his leadership and the impact he has made across our organization and industry. He helped shape critical initiatives and strengthen the value we provide our members,” Kevelighan said.
“I have been deeply honored to serve the insurance industry as a leader of the Triple-I and IRC for the last four years, educating consumers, media, policymakers and industry professionals every day,” Porfilio said. “I am looking forward to my next career chapter and continuing to work and serve in the insurance industry.” Kevelighan added, “We are fortunate to have a strong succession plan in place with Pat, and his deep understanding of strategy, risk management and collaborative innovation make him an excellent fit for this expanded leadership role at Triple-I and IRC.”