Three in four US insurers (76%) have implemented generative AI (GenAI) in at least one business function, new research suggests. However, less than half (45%) believe the benefits currently outweigh the risks, according to a June 2024 survey by Deloitte, which assessed the readiness of 200 US insurance executives to scale GenAI across their organisations.
The study included respondents from both the life and annuity (L&A) and property and casualty (P&C) sectors, with 100 executives surveyed from each group. Adoption levels were higher among L&A insurers, with 82% reporting operational use of GenAI, compared to 70% in the P&C segment. Larger insurers were more likely to have initiated implementations, suggesting that organisational scale may contribute to earlier adoption.
“It’s likely that no other technology offers as much transformative potential as GenAI,” the report from Deloitte Center for Financial Services stated. “This technology has the potential to change the way insurers operate, assess risks, launch products, and interact with customers, among other things. However, the journey toward scaling GenAI has challenges on multiple fronts. In the last year or so, many insurers have dipped their toes in GenAI proofs of concept, but despite the hype, and some initial successes, many may not yet be fully prepared to harness the full potential of GenAI.”
Despite widespread experimentation, many insurers remain in the early stages of implementation. The survey found that a significant portion of initiatives are still in the scoping phase, with relatively few insurers progressing to broader deployment. This cautious approach is more evident among smaller insurers, particularly those with annual revenues under $500m, where concerns about potential risks appear to outweigh the perceived advantages of GenAI.
Executives cited limited data capabilities and workforce readiness as major obstacles to scaling. Survey participants indicated that their organisations were least prepared in areas related to talent availability and employee skill sets. In response, many insurers are redesigning hiring strategies to prioritise candidates with digital and AI proficiency and are investing in workforce training to enhance internal capabilities.
Successful early implementations were more common among insurers that had established collaboration across business, technology, data, and talent functions. Respondents highlighted the importance of a strong data foundation and governance strategy in creating the right conditions for GenAI adoption. Some insurers have built on prior investments in data architecture, moving toward modular ecosystems that support both structured and unstructured data use.
Insurers navigate trust issues and evolving AI regulations
Trust and accountability emerged as critical concerns. Executives cited risks such as algorithmic bias, lack of explainability, and the potential for inaccurate outputs as major barriers. The growing use of external and internal data sources also raised questions about cybersecurity and data privacy. In response, many insurers are incorporating governance, transparency, and oversight into their GenAI strategies.
Insurers are also responding to a shifting regulatory landscape. In the US, 19 states have adopted the National Association of Insurance Commissioners’ model bulletin on AI use, which encourages insurers to ensure compliance with consumer protection laws, eliminate bias, and maintain transparency. State-level legislation in California and Colorado has further reinforced requirements for human oversight and accountability in AI decision-making processes.
Read more: GenAI spending to surge to $644bn globally in 2025
