Insurers Expand AI Use Beyond Traditional Underwriting

Mashrukh Khan: Insurers are pouring more money into artificial intelligence and looking past the usual focus on underwriting as the technology matures and spending gathers pace. The question now is which applications will actually deliver the strongest returns.

Sahil Haider, an insurance analyst at GlobalData, observed in a July report that firms are shifting attention toward better customer engagement, faster product innovation and smoother operations once the basics of risk selection improve. A GlobalData survey found that 34.4 percent of respondents still expected underwriting and risk assessment to gain the most from AI, followed by customer service at 20.4 percent, claims management at 18.3 percent, product development at 16.1 percent and marketing and distribution at 10.8 percent. Underwriting held the top spot but its share dropped 11.4 percentage points from a year earlier, while product development recorded the largest rise at 8.9 percentage points. The survey ran across Verdict Media websites between mid April and late July 2026.

Beyond pricing and risk selection, carriers are already applying AI to process claims, spot fraud, handle customer queries and design new products. Spending is set to accelerate. Fortune Business Insights valued the global AI insurance market at 10.4 billion dollars in 2025 and projects it will reach 13.5 billion dollars this year before climbing to 154.4 billion dollars by 2034, reflecting annual growth of 35.7 percent. In Asia Pacific the market stood at 2.8 billion dollars in 2025, with China contributing 710 million dollars and India 580 million dollars, and the region is expected to expand at 42.2 percent a year.

Carriers across Asia are investing in automation and data analysis as digital services spread and smartphones generate richer customer information. These tools can help reach people in markets where insurance ownership remains relatively low, according to the same report. Industry voices note that measurable value is already appearing in distribution, claims and back office functions, yet the bigger gains may come only when separate AI uses are joined end to end across the full customer and employee journey. Measuring return on investment remains difficult for many, with just a small share of insurers expressing confidence in tracking results, and concerns about data quality, governance and security continue to shape how far and how fast the technology can be scaled.

The shift beyond underwriting is under way, but turning rising AI budgets into consistent commercial gains will depend on integration, clear measurement and careful oversight.