Insurance’s AI adoption revealing ‘striking paradox’ – Earnix

Statistics show that artificial intelligence (AI) is now demonstrably driving gains in speed, decision quality and operational efficiency at insurance firms.

However, while uptake and investment in the technology is growing, the data has also revealed a “striking paradox” in the market – operational readiness, in the form of talent, skills and governance, has been left to lag behind.

These insights come from an early outlook of insurance software firm Earnix’s Insurance Industry Trends Report 2026, penned exclusively for Insurance Times by insurance director Andy How.

The research found that AI has become remarkably wide spread, with nearly all surveyed firms reporting its use in some form in their workflows and nearly 80% reporting a plan to research or deploy generative AI within the next two years.

Despite this, skills and talent remain a major unaddressed blocker. The complexity of insurance business processes, combined with the prevalence of legacy technology, mean that tools cannot simply be dropped on top of existing systems, but require dedicated resource and technical investment to be integrated successfully.

Competitive advantage

Progress of this manner requires material investment, but currently only one in three executives were found to strongly agree that their firm has the required talent already in-house.

This represents a potential stumbling block, with How explaining: “I do firmly believe that the competitive advantage will belong not to insurers with the most AI tools, but to those with the clearest, most coherent strategy and the talent to execute it.

“This is where the distinction between AI adoption and AI maturity becomes critical. Adoption measures whether organisations are using AI, maturity reflects whether they have the governance, integration frameworks and skills to use it responsibly, consistently and at scale.”

Failing to develop the internal skills to implement the technology properly would risk more than just a competitive disadvantage, the report warned, with it also leaving firms exposed to issues around auditability, documentation and regulatory alignment introduced by immature AI usage.

How concluded: “The key takeaway is unequivocal – AI adoption has reached the early majority, but readiness has not.

“If insurers can resolve this imbalance, by strengthening skills, modernising data foundations and embedding governance into every AI-driven workflow, they will not merely keep pace with technological change, they will redefine what resilience and responsiveness look like in the decade ahead.”