Published
Insurers spend an average of 70% of their annual IT budget maintaining legacy systems, according to PwC, but this kind of tech is no longer just inefficient, it is a competitive risk.
Despite the industry lag, AI in the insurance market has grown exponentially in recent years due to advancements in AI algorithms, expansion of the insurtech ecosystem, increasing focus on personalization, integration with IoT devices and an evolving cyber insurance landscape.
After reaching 7$ billion in 2024, the market is expected to reach $10 billion in 2025. By 2029, AI in insurance is predicted to reach nearly $36 billion.
"In the fast-moving world of P&C insurance, speed and accuracy in claims handling is a distinct advantage to carriers and non-negotiable for customers while selecting insurance,” said Adil Ilyas, Genpact’s global insurance business leader.
“AI has rapidly evolved from a ‘nice-to-have’ to enabling ‘competitive edge and advantage’ for carriers,” he added. “While many policyholders remain neutral about AI in theory, their perception shifts multi-fold when it delivers tangible value, such as faster claims resolutions, proactive updates, and clearer communication. For insurers still constrained by legacy systems, the message is clear—lagging on AI adoption isn't just a technology gap, it's a growing risk of negative customer experience.”
Meanwhile, 55% of U.S. adults say they are neutral about their insurance companies using AI, while 25% view it negatively, according to a recent Genpact study.
At the same time, 46% say they support AI adoption if it speeds up the claims process, and 29% are more likely to choose an insurer that offers automated and digital interactions.
“The shift in sentiment is especially pronounced among younger generations,” Genpact said in the study. “Millennials and Gen Z are more likely than Baby Boomers and Gen X to choose an insurer using AI to improve services, including policy quote generation (32% vs. 12%), claims processing (28% vs. 9%), and customer service (27% vs. 10%). This generational divide highlights a growing expectation for faster, more efficient AI-enabled insurance experiences.”
This article first appeared in PropertyCasualty360.com. Adil Ilyas, Genpact's global insurance business leader, was interviewed by Joe Toppe, managing editor at PropertyCasualty360.
