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AI in Insurance

AI Isn’t Replacing Insurance Experts, It’s Amplifying Them - Newsweek

Artificial intelligence is accelerating across the insurance and collision-repair ecosystem in ways that no longer look experimental. What began as a set of narrow, mostly internal tools has shifted into a strategic priority for an industry under pressure to move faster, manage more data and meet rising customer expectations.

“The reality is, AI isn’t new to the auto insurance and collision repair industries,” Kristyn Emenecker, vice president of product management at CCC Intelligent Solutions, told Newsweek. “They’ve been using it for years. At CCC, we’ve been investing in AI for more than a decade and have been embedding AI into our products for more than five years. What’s different now is the urgency and scale.”

Boards, she added, have moved from “let’s test AI” to “we need to adopt AI responsibly,” as capital continues flowing into insurtech.

A Shift from Experimentation to Execution

Emenecker said the momentum is being driven by familiar pressures: productivity, data volume and and changing expectations around speed and personalization. “The reasons for AI adoption are driven in part because the industry is under pressure to deliver productivity at scale, manage massive amounts of data, and meet customer expectations for instant, personalized experiences,” she said.

Industry research reflects the same pressure. McKinsey reports that property and casualty insurers stand to gain their largest AI payoffs in claims automation and fraud detection, outpacing underwriting, policy administration, and other core functions.

News

State Farm® seeks 6.2% Auto Rate Reduction for California Drivers

The new year will bring welcome news for State Farm auto customers across California. State Farm Mutual Automobile Insurance Company has submitted a rate filing to reduce personal auto insurance rates by 6.2%, with a targeted effective date of February 23, 2026, pending approval from the California Department of Insurance.

“This rate reduction reflects our ongoing commitment to provide quality coverage and increasingly competitive rates for our customers,” said Dan Krause, State Farm Senior Vice President. “We remain committed to helping build a sustainable insurance market for all Californians.”

Recent trends involving less costly physical damage claims have allowed State Farm to lower rates. Rate reductions will vary by individual policy. This adjustment applies to current customers at policy renewal, as well as new and returning customers. We encourage customers who remain cost conscious to contact their agent to discuss any additional steps customers can take to save more, and review if they are eligible for more auto insurance discounts in California.

This filing represents another positive step for State Farm in California. As many Americans continue to face challenging economic conditions, State Farm is actively working with elected officials and industry partners on creating a sustainable insurance environment in California – one that balances risk and increased rates, ensures long-term market stability and availability.

Lloyd's launches investigation after AIG drops John Neal over alleged workplace relationship

Lloyd’s of London has launched an independent investigation after AIG withdrew its support for John Neal’s appointment as its next chair, following allegations of a workplace relationship during his time at the insurance marketplace.

The matter came to light after AIG dropped Neal’s candidacy for the chairmanship upon learning of the alleged relationship. In response, Lloyd’s has commissioned an external law firm to conduct a full investigation into the alleged situation involving its former CEO. A spokesperson for Lloyd’s confirmed that the market is committed to transparency throughout the process and that the investigation will be handled independently.

In a statement issued to Insurance Business, the Lloyd’s Market Association (LMA) welcomed the move, highlighting the importance of transparency and cultural standards in the market. CEO Sheila Cameron said the association “welcomes the announcement from Lloyd’s about its investigation, which will be supported by a law firm. In the renewed spirit of transparency, we look forward to seeing these results made public and concrete actions taken on the back of the findings.”

Commentary/Opinion

Lara's Revenge Regulation Will Gut Public Participation in Insurance Rate-Making, Consumer Watchdog Says at Hearing Today

Insurance Commissioner Ricardo Lara's proposal to change the rules that govern consumers' right to scrutinize and challenge unjustified rates would derail the public participation process set up by insurance reform Proposition 103, Consumer Watchdog told the Commissioner in a hearing at 1pm today. Thirty-six public interest organizations also urged Lara to withdraw his proposal.

By giving himself the power to deny compensation to consumers who disagree with his positions, Lara's draft regulation would make it financially impossible for consumers to mount challenges to unjustified and discriminatory rates – a power that Consumer Watchdog has used to save Californians over $6 billion since 2002, at a cost of 25 cents per $100 saved, Consumer Watchdog explained in its analysis.

For example, Consumer Watchdog is presently challenging State Farm's request for a $1.2 billion rate increase the company says it needs to continue to do business in California. Commissioner Lara has already approved a conditional "emergency" rate increase of $749 million.

"If Commissioner Lara's plan goes into effect, no consumer group will be able to afford to challenge insurance companies – or the commissioner – when they propose excessive or unfair rates," said Will Pletcher, Consumer Watchdog's Litigation Director. "The result will be more and larger increases in the premiums Californians pay for home, auto and business insurance." PRESS RELEASE

Can insurers really keep up as customer expectations shift?

After hours of doing battle with frustrating online forms, captcha loops, and AI chatbots, many fans finally managed to secure Oasis reunion tickets in late 2024.

This arduous slog ultimately underlined that customer expectations are rarely aligned with reality. Insurance claims can often feel eerily similar, littered with endless forms and subpar digital systems. For many consumers, the process has become a ‘Wonderwall’ they just can’t climb.

The Oasis experience put a spotlight on customer expectations internationally, with pressure mounting on all industries to adapt. To understand how insurers can keep pace with these shifting dynamics, FinTech Global‘s Harry Slade spoke with three industry leaders shaping the next wave of digital transformation: Peter Ohnemus, CEO of dacadoo; Sebastian Gruber, co-founder and CEO of hi.health; and Nadia Hitman, VP Marketing at Air Doctor.

While missing out on concert tickets is frustrating, the consequences in insurance are far more serious.

Customers expect the same speed and clarity everywhere they go online, and the gap between what they experience elsewhere and what insurers deliver is widening fast.

According to a recent study by Insurity, 22% of consumers now avoid filing claims altogether because the digital process is too frustrating, and 64% say they’d switch providers for a smoother experience.

Air Doctor’s Hitman puts it plainly, “When someone is sick abroad, they aren’t thinking about policy language, they just want someone to help, quickly and clearly.”

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InsurTech/M&A/Finance💰/Collaboration

Insurance IPOs hit 20-year high on Wall Street after tariff-driven chaos

Insurance companies' first-time share sales on Wall Street hit a 20-year high this year as investors flocked to firms that were insulated from U.S. President Donald Trump's trade war.

Predictable cash flows and resilient business model gave private equity firms an opportunity to sell some portfolio ‌companies and offered investors a safe haven as other industries got whipsawed by escalating tariffs, sticky inflation, labor market cracks and geopolitical turmoil.

Apollo-backed Aspen Insurance and American Integrity ‌Insurance were among the first IPOs to trade after Trump initiated a trade war, which sent the markets sideways and derailed other debuts. Aspen and American Integrity raised nearly $457 million and $127 million, respectively, in their initial public offerings.

STABLE EARNINGS

"The tariff impact and the resulting volatility pushed many investors towards companies with more stable earnings, cash flows. Insurance is one of those niche areas that fits that profile,"⁠ said Mike Bellin, IPO services leader at ‌PwC U.S.

Insurtech Exzeo was the latest to tap public markets earlier this month, raising $168 million, in a pivot away from parent HCI Group's previous plan to pursue a spin-off.

"The sector has ‍benefited from being a bit more insulated from tariff pressure than others," said Andy Mertz, head of equity capital markets at Citizens, which has underwritten five insurance IPOs this year. MORE

The new M&A reality: Insurance choosing scale over value in 2026

What's pushing carriers and brokers toward transformational M&A plays?

The insurance mergers and acquisitions (M&A) landscape has entered a markedly different phase, reshaping strategies across carriers, brokers, and investors.

David Hitsky (pictured), a former strategy leader at Oliver Wyman and now partner at L.E.K. Consulting and head of the firm’s insurance practice, said today’s M&A environment reflects a mix of macroeconomic pressures, industry maturation, and structural change that will continue into 2026.

“Rising interest rates and private equity capital being less readily available, combined with more expensive financing, have altered the landscape,” he told Insurance Business. “The money’s simply not as cheap as it used to be.”

Why the anticipated rebound never arrived

At the start of 2025, many analysts predicted an M&A rebound in the second half, on the expectation that there would be more clarity around inflation and US trade policy. So far, that rebound has yet to materialize in insurance. “I’m not sure anything has been finalized,” Hitsky said of the Trump administration’s tariff policies. “Companies are becoming more comfortable being uncomfortable, but that’s not the same as confidently knowing where things are heading.”

Research

How Advanced Vehicle Scoring Models Are Transforming Commercial Auto Insurance Pricing : Risk & Insurance

With commercial auto losses still mounting, actuaries are tapping big datasets and refined scoring to enhance risk assessment and pricing

The commercial auto insurance market has faced persistent challenges in recent years, with rising claim costs and evolving vehicle technology creating pricing uncertainty. According to industry data, commercial auto combined ratios have exceeded 100 percent for multiple consecutive years, highlighting the need for more sophisticated risk assessment tools. Now, actuaries are evolving advanced vehicle scoring models that analyze hundreds of data points to help insurers better understand and price the specific risks associated with individual vehicles.

“The vehicle symbol is a summary variable that tells you about the vehicle characteristics. It represents what we know about a car based solely on how it’s built,” said Gary Wang, Senior Consulting Actuary at Pinnacle Actuarial Resources. “It indicates how risky this car is when it’s out on the road.”

“VBS stands for vehicle build score, which can be thought of as a model for vehicle characteristics,” Wang explained. “This tool’s greatest values are completeness and accuracy. It allows insurers to better understand the specific characteristics of the vehicles they are insuring.”

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Announcements

Five Sigma and Sutherland Partner to Deliver AI Claims Modernization for Insurers

Five Sigma and Sutherland Partner to Deliver AI Claims Modernization for Insurers

In a move set to accelerate AI adoption in the insurance industry, Five Sigma, the AI claims technology company behind Clive™, the industry’s first Multi-Agent AI Claims Expert, and Sutherland – a global business and digital transformation company, announced a strategic partnership designed to reshape the way insurers handle claims, from first notice of loss to final settlement.

The partnership combines Five Sigma’s Claims Management AI and automation technology with Sutherland’s AI-native digital engineering and Business Process-as-a-Service (BPaaS) expertise, creating a powerful combination that accelerates insurers’ AI transformation journey from strategy to execution.

Together, the companies aim to offer insurers a comprehensive, front-to-back claims modernization solution that dramatically reduces cycle time, claims leakage, and operational cost, while improving policyholder experience.

Meeting the AI Moment in Insurance Claims

MOREfive-sigma-and-sutherland-partner-to-deliver-ai-claims-modernization-for-insurers/

Predict & Prevent

LeakSecure™ Rolls Out Major App Upgrade for Smarter Home Water Protection

Notation Labs, a leader in smart home water management, today announced a major update to the companion app for LeakSecure™, its intelligent home water protection system. With nearly 30% of homeowners-insurance claims stemming from water damage, the need for proactive protection has never been clearer.

The updated LeakSecure experience answers that need with precise control, proactive safeguards, streamlined insurance benefits, and seamless integration with professional plumbing partners that support homeowners long after the initial install.

The LeakSecure™ device pairs with the updated app to deliver precise, automatic protection at the main water line, helping homeowners stop leaks before they cause major damage.

"We're continually improving everything across LeakSecure to make the system easy to use, fully integrated, and built for real-world protection," said Jeff Stebbins, Vice President of Operations for LeakSecure. "That means giving homeowners a simple way to safeguard their biggest investment, and giving our plumbing partners transparent, in-app tools that make ongoing service straightforward and effective."

Payments

One Inc Recognized as a Fastest Growing Company in North America on the 2025 Deloitte Technology Fast 500™ | Morningstar

Success of Leading Digital Insurance Payments Provider Driven by Innovation and the Trust of More Than 290 Carriers

One Inc, the leading digital payments network for the insurance industry, today announced it was named one of the 2025 Deloitte Technology Fast 500™, an annual ranking of the 500 fastest-growing technology, media, telecommunications, life sciences, fintech, and energy tech companies in North America. Ranked at 311, this is One Inc’s first appearance on the list.

Achieving 244% revenue growth from 2021 to 2024, One Inc continues to solidify its lead as the premier digital payments provider in insurance. The company, which serves more than 290 insurers, achieved 54% revenue growth in 2024, underscoring its continued momentum and industry-leading innovation.

“Our inclusion as one of the prestigious Deloitte Technology Fast 500 is a testament to the company’s steadfast commitment to help carriers deliver on the promise of insurance,” said Ian Drysdale, CEO of One Inc. “We would like to thank our customers, partners, and employees for their ongoing support, and we look forward to continue driving digital transformation across the insurance industry.”

This news builds on One Inc’s growth trajectory and continued success in the digital payments space.

U.S. Airlines Expecting Record Breaking Thanksgiving Travel Season – Airlines For America

Friday kicks off the busy Thanksgiving holiday travel period (Nov. 21 through Dec. 1), and Airlines for America (A4A) projects U.S. airlines will carry more than 31 million passengers over the holiday – an all-time high.

Over the holiday period, A4A expects U.S. airlines will fly 2.8 million passengers per day. To meet this demand, U.S. airlines will offer 45,000 more seats daily than they did in 2024. The busiest days over the Thanksgiving holiday are expected to be Sunday Nov. 30 and Monday Dec. 1.

“We’re all looking forward to going home for the holidays. Our carriers have been working to fully prepare for what’s expected to be a record-breaking Thanksgiving,” said A4A President and CEO Chris Sununu. “We’re grateful for all aviation employees who work tirelessly to get you home safely for the holidays. With airports expected to be busy, we ask all passengers to allow for extra travel time, pack their patience and carry-on kindness this holiday season.”

“With the government shutdown over, we are calling on Congress to find a solution that ensures essential aviation workers and the traveling public are never again caught in the middle of political disputes,” said Sununu. “Congress needs to pass legislation so that air traffic controllers, TSA officers and CBP agents are paid during future shutdowns, ensuring operational stability as well as the safety and security of our airspace.”