AM Best: Artificial Intelligence Appears to Be Ready, but Most Insurers Are Not

Why It Matters

The survey highlights that without modernized data and legacy systems, insurers risk lagging behind competitors as AI-driven efficiency and underwriting advantages become industry standards.

Key Takeaways

• 41% of insurers actively use AI in core business functions.
• Only 19% report AI implementation at an advanced, enterprise‑wide stage.
• Data readiness, security, and legacy integration are top implementation hurdles.
• AI mainly boosts underwriting, claims processing, and developer productivity.
• Workforce impact seen as redeployment, not widespread job elimination.

Summary

AM Best’s latest market‑wide survey reveals that artificial intelligence is no longer a futuristic concept for insurers, but its full‑scale deployment remains uneven. While 41% of respondents report active AI use in core functions and 63% have formal AI policies, only 19% consider their implementations advanced enough to reshape the enterprise.

The data shows a clear gap between ambition and execution. Nearly 60% expect AI to transform their business models within three years, yet two‑thirds say it is too early to gauge competitive advantage. The chief obstacles cited are data readiness (45%), security and privacy (43%), and legacy system integration (41%)—issues that stem from fragmented, outdated data environments rather than the technology itself.

Edin Sierra emphasized that insurers are moving from experimentation to disciplined execution, not resisting AI. Use cases are already delivering value: underwriting teams leverage generative AI to flag low‑risk applicants, claims departments employ AI for document review and fraud detection, and developers use it for code generation and testing. Staff concerns are modest, with 37% expecting redeployment to higher‑value work and 30% seeing no material staffing change.

The findings signal that insurers must prioritize data governance, system modernization, and robust risk oversight before AI can become a true competitive differentiator. Measuring ROI remains nascent—only 13% feel confident in quantifying returns—so firms that successfully align infrastructure with AI strategy are likely to capture early efficiency gains and set the stage for longer‑term transformation.

Original Description

Edin Imsirovic, director, and Kaitlin Piasecki, industry research analyst, both of AM Best, discuss the results of a recent AM Best survey that evaluates the industry's position on strategy and implementation of artificial intelligence.

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