Millions spent on insurance AI with little to show for it

The global insurance industry is investing in artificial intelligence (AI) programmes and initiatives at “record levels”, but getting “almost nothing” back.

This is according to a new report from insurance technology and automation firm Simplifai, released today (1 April 2026), which suggested that many firms were caught in a phase of “pilot purgatory”.

The analysis, based on data from McKinsey, EY, Deloitte and Swiss Re, found that while 99% of insurers now have generative AI initiatives in place and 83% of carriers were spending more than $5m (£3.76m) a year on such initiatives, only 42% had deployed AI into active business functions.

Worse still were the returns that were seen on such initiatives. Indeed, fewer than 15% of insurers reported a measurable impact on combined ratio, cycle time or loss ratio from the technology implementations.

Fundamental disconnect

Simplifai said that the report had identified a “fundamental disconnect between AI investment and AI results and a clear, replicable pattern among the minority of carriers actually moving the needle”.

Those carriers that had moved the needle, it suggested, did not chase increasingly sophisticated technology, but instead had meaningful differences in their approach to leadership, workflows and business outcomes, deploying their solutions end-to-end rather than at fixed points in existing processes.

Speaking on the findings, Artem Gonchakov, chief executive at Simplifai, said: “Insurance doesn’t have an AI problem, it has a strategy execution problem. Technology works. The business model doesn’t.”