TechTalk: The real AI threat to insurance jobs is doing nothing

As someone who has previously lost a job unwillingly, I know the pain and sudden feeling of dread that comes with it. Following a Greek island-hopping holiday, the day I returned I received the unwelcome news that I would be made redundant from my first role as a journalist.

This left me feeling like I had had the rug pulled from beneath me. Like many that have experienced it, when I see job cuts in any industry, my toes curl.

In December 2025, Allianz announced plans to cut up to 1,800 jobs in its travel insurance division due to the automation of manual processes by artificial intelligence (AI) – mostly in call centres.

Chubb also plans to reduce its global workforce by approximately 20% as part of a digital transformation initiative, potentially affecting 8,500 to 9,000 jobs.

These examples highlight the pressing challenges within the industry – if established players like Allianz and Chubb are moving forward with cost reductions, what’s to prevent their competitors from following suit?

The insurance industry is built on a substrate of socialising and empathy. The impact of AI on the sector is unprecedented – and needs to be struck with the right balance between employer and employee.

A people-centric market

Kanika Chaganty, chief data officer at Brit, captured the essence of what makes insurance different from other sectors undergoing technological upheaval.

She said: “The insurance industry and the London market is very people centric. This is a place where the deals were discussed over dinner and sometimes written on a paper napkin in the past, that’s how human centric it is.”

Yet according to surveys of industry professionals from insurers and MGAs, commissioned by insurance technology provider RDT and conducted between October 2024 and January 2025, concerns around AI adoption centred heavily on the human side of operations.

Over-reliance on technology, lack of control over decision-making, loss of human touch in customer interactions and job security were all cited in 40% to 50% of responses.

A separate RDT poll of claims handlers, released in June 2025, found that 32% reported fearing for their job security as a result of technological advancements.

Money and profits are drivers for any business, but industry leaders should not turn their back on what makes the industry tick – the people.

Matthieu Caillat, group chief technology and AI officer at Axa acknowledged this tension at a recent Axa press conference: “At the end of the day, will there be a transformation for the workforce? Surely, any transformation leads to transformation in the workforce. So for us, it’s really important that we get prepared and we have a very proactive workforce planning to make sure that we bring our people along.”

Adapt or be replaced

An industry that has been previously branded stubborn about modernising now finds itself in a position where it must adopt the benefits, the cuts and the change that AI brings – or be left behind. That includes the people who make their careers within it.

Tom Clark, chief solutions officer at HX, offered a stark warning for those who think they can simply wait out the change of winds.

He said: “You aren’t going to lose your job to AI, but you are at risk of losing your job to someone else who is using AI. And I think that’s a really important distinction to make.”

PwC research from January 2026 has contrasted this view with the scale of concern among those entering the workforce, however. Over 40% of entry-level employees believe technological change will impact their jobs to a major extent over the next three years, with nearly a third worried about how AI will affect their careers.

Clark claimed that perceptions had shifted in recent years: “Two years ago, AI was the thing that everyone was afraid was going to take their jobs, whereas today, it actually is a tool and people can understand how it benefits them.”

He continued: “Underwriters, actuaries and the folks who are working with us are saying, actually, this is something that’s going to allow me to do my job better and faster and be more successful. And so it’s less of a thing to be feared and more of a thing to be embraced from our perspective.”

The skills gap paradox

Yet even as the industry embraces AI as a tool rather than a threat, a troubling paradox is emerging. If entry-level tasks are automated, how will the next generation of underwriters and claims handlers learn the fundamentals needed to question AI’s outputs?

Tom Hughes, director of underwriting at the International Underwriting Association (IUA) raised this concern: “There is this really important question about if you are automating some of the introductory tasks that practitioners might undertake when they enter the market. What does that mean for talent?”

Hughes added: “By collecting the expertise in the market, still making sure that there is time for the next generation of practitioners to sit down with senior underwriters, with senior claims people, to learn the fundamentals of the processes. Without that, how can you question the output of a generative AI tool, how can you consider actually whether that is right or wrong, or in line with your underwriting guidelines or your company objectives?”

The data paints a concerning picture. Joe Shaw, director of claims at the IUA noted: “There is a skills gap. When we surveyed our members, I think it was 95% of the claims leaders said that they thought there was a skills gap in claims. And then on top of that, AI being overlaid is hoping to automate certain tasks, but they might be tasks that are key for training.”

Caillat acknowledged this risk: “AI can actually help a lot. Of course, there is a risk that if we don’t train people, if our junior staff just use a machine, you click on the button and it’s done, then they don’t learn. But the reality is that AI is also helping us to transfer the knowledge.”

The cost of doing nothing

Clark observed that many insurers remained stuck in the past: “Most of the insurers we’re speaking with are still using the tools of the 20th century to do the work of the 21st century. So there’s obviously something not quite right there.”

Shaw was blunt about the consequences of inaction: “The worst thing that a firm can do at the moment is do nothing, because AI is happening across the board. You’ve got people coming into the market who are using AI on a daily basis.”

Shaw added a counterintuitive warning: “As much as there is this concern that it’s going to take people’s roles, you’re going to have people coming into the workforce that are saying, what is this tool that everyone else is using? Why are you not using it? You might find that actually, then you have a kind of a retention issue of talent, because you’re behind.”

Humans are naturally opposed to change. But change they must, especially in an industry that will leave behind those unwilling to adapt to the times. The imperative is clear – make yourself indispensable.

With generations coming through that will be AI adept, a growing population and fewer jobs, competition will be absolutely rife for roles in the industry. Although the ethics of this wave of transformation will be protested by some, with Beazley warning that in 2026, the resulting job displacement from AI will likely lead to physical protests against data centres.

It should be acknowledged that AI is an unstoppable wave of change that people must learn to ride in their careers – or see themselves get whitewashed.