Insurance customers aren't seeing the benefits of AI

While most insurance companies tout AI deployment in 2025, customers say they're missing the payoff, according to a Genpact study.

Only 36% of US customers say their digital experience has improved, the data showed, despite 69% of insurance companies having deployed 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."

Sixty-two percent of respondents believe competitive advantage will come from greater efficiency in high-volume tasks. At the same time, 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.

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.

Despite growing investment in training and partnerships, only 2% of insurance executives report that nearly all their team members are fluent in AI. In fact, 69% say that either very few team members, or at best some, are AI fluent. This talent shortfall significantly limits the industry's ability to scale AI effectively.

Meanwhile, only half of insurance customers (50%) trust insurers to provide accurate, personalized quotes, the study showed. At the same time, Ilyas said today's policyholders demand fast, personalized service.

"To meet these expectations and remain competitive in a volatile market, insurers need adaptable, trustworthy AI-powered platforms and solutions that deliver real measurable value," he finished.

Moving forward, Genpact suggests insurers align AI strategies with their organization's maturity level. According to the report, share tangible outcomes through high-impact use cases, hone in on removing organizational silos, upskill teams, and extend AI throughout the business while prioritizing impactful projects and ensuring systems are scalable and resilient to handle future needs.

This article was originally published in PropertyCasualty360.com and authored by the publication's managing editor, Joe Toppe.