A new survey says that insurance companies are now harnessing artificial intelligence throughout most of their operations, including fully automated underwriting.
The report, from Stamford-based Information Services Group, finds that insurers are moving from manual, document-heavy workflows to automated processing of claims, quotes, policy documents and other elements of daily operations.
ISG, which is an AI-centered technology research and advisory firm, says the outcomes could be increased efficiencies, autonomous operations, hyperpersonalized products and stronger relationships with policyholders.
“The embedding of AI technology in the insurance industry has quickly matured from experiments to production-ready implementations across the insurance value chain: underwriting, claims, customer experience, fraud detection and risk management,” said Dennis Winkler, director of insurance at ISG.
The report was compiled from questionnaires sent to 28 different service providers and vendors to the insurance sector.
According to the report, underwriting teams are using generative AI to extract data from emails, PDFs and images to populate systems automatically.
Models trained on historical data generate preliminary assessments that highlight gaps and improve risk assessment. This automation reduces manual review and shortens turnaround times as AI analyzes financial data, inspection findings and external data to form complete risk profiles.
When claims are filed, AI accelerates processing by understanding claimants’ descriptions, extracting relevant details and initiating workflows.
Image models assess damage by analyzing photographs to calculate cost estimates, while natural language processing analyzes narratives for inconsistencies and anomalies that may indicate fraud.
Together, these capabilities can reduce cycle times from weeks to days and improve compliance, according to the study.
Insurers are implementing agentic AI systems that can independently pursue objectives, adapt to changing conditions and coordinate across systems without continuous oversight, ISG says.
In some cases, AI agents are capable of carrying out the full underwriting process from submission to quote. They can also manage entire claim lifecycles for losses, including verifying coverage and approving settlements within authority limits, for losses that are not complex, something the report says will lead to fewer administrative staff
“In three to five years, AI agents are likely to handle many routine insurance operations while staff members focus on complex risks, strategic relationships and innovation,” said Ashish Jhajharia, lead author of the report. “Insurance involves judgment, empathy and relationship management, which remain distinctly human capabilities.”
The report did not further address employment impacts in the insurance industry, which remains a major employer and economic driver in Hartford and across Connecticut.
