Insurers prepare for AI-led operations in 2026

By Vriti Gothi

As the global insurance industry moves into 2026, artificial intelligence is expected to play an increasingly structural role in how insurers design products, assess risk, and serve customers. From underwriting and claims management to policy recommendations and customer engagement, AI-driven systems are steadily transitioning from experimental tools to core operational infrastructure.

Insurers have long grappled with complex processes, high administrative costs, and lengthy turnaround times—particularly in claims processing and product development. The growing maturity of generative and agentic AI technologies is now offering a pathway to address these inefficiencies at scale. By automating data-intensive tasks and enabling faster decision-making, AI is poised to shorten processing cycles and accelerate time-to-market for new insurance products.

Industry participants view this shift as both a competitive necessity and an operational evolution. Faster claims assessment, real-time policy customisation, and improved fraud detection are among the most immediate benefits insurers are seeking. AI models trained on vast datasets can analyse claims documentation, historical loss data, and customer profiles far more quickly than traditional manual workflows, allowing insurers to respond to policyholders with greater speed and consistency.

Rob Schumacher, co-founder of Feather Insurance, said, “AI is revolutionising every industry, and insurance is no different. With the help of AI, insurance firms can offer faster and more efficient services with a reduction in processing times and faster product times-to-market. The deployment of generative and agentic AI means it can assist with critical tasks, such as claims assessment and accurate and personalised policy recommendations. As the industry continues to harness the potential of AI, 2026 will demand a careful balance between technological innovation and the human touch. People will shape the real impact of AI in insurance, with human review allowing teams to guide AI outputs and ensure consistent quality. AI will become the powerhouse of back-end operations, handling preliminary claims analysis and supporting smoother customer experiences. However, human expertise remains central in moments that demand trust, reassurance and nuanced advice.”

Beyond claims, AI is also reshaping underwriting and product innovation. Insurers are increasingly using machine learning to refine risk pricing models, simulate portfolio outcomes, and tailor coverage options to individual customer needs. This capability is particularly relevant in markets facing rising climate risks, healthcare cost pressures, and evolving regulatory expectations, where traditional actuarial approaches alone may struggle to keep pace.

However, as AI adoption deepens, insurers are also becoming more cautious about over-automation. Regulatory scrutiny around algorithmic decision-making, data privacy, and explainability is intensifying across major markets. Insurers must ensure that AI-driven outcomes are auditable, fair, and aligned with regulatory standards particularly in areas such as claims approval and pricing decisions that directly affect consumers.

This has reinforced the importance of maintaining human oversight within AI-enabled workflows. Rather than fully replacing human judgment, many insurers are positioning AI as a decision-support layer that handles preliminary analysis while leaving final determinations to experienced professionals. This hybrid model is seen as essential for maintaining trust, especially in emotionally sensitive situations such as health or life insurance claims.

As 2026 unfolds, AI is expected to become less of a differentiator and more of a baseline capability across the insurance value chain. The insurers that stand out will be those that deploy AI not simply to move faster, but to operate more intelligently combining automation with accountability, and efficiency with empathy.