Despite its traditionally risk-averse nature, the insurance industry is being fundamentally reshaped by AI.

AI has already become vital for the insurance industry, touching everything from complex risk calculations to the way insurers talk to their customers. However, while nearly eight out of ten companies are dipping their toes in the AI water, a similar number admit it hasn’t actually made them any more money.

Such figures reveal a simple truth: just buying the fancy new tech isn’t enough. The real winners will be the ones who figure out how to weave it into the very fabric of who they are and everything they do.

You can see the most dramatic changes right at the heart of the business: handling claims. That mountain of paperwork and endless phone calls, a process that could drag on for weeks, is finally being bulldozed by AI.

A deployment by New York-based insurer Lemonade back in 2021 resulted in settling over a third of its claims in just three seconds, with no human input. Or look at a major US travel insurer that handles 400,000 claims a year; it went from a completely manual system to one that was 57% automated, cutting down processing times from weeks to just minutes.

However, this isn’t just about moving faster; it’s about getting it right. AI can slash the kind of costly human errors that lead to claims leakage in the insurance industry by as much as 30%. The knock-on effect is a huge productivity leap, with adjusters able to handle 40-50% more cases. This frees up the real experts to stop being paper-pushers and start focusing on the tricky cases where a human touch and genuine empathy make all the difference.

It’s a similar story for the underwriters, the people who calculate the risks. AI is giving them superpowers, letting them analyse colossal amounts of data from all sorts of places – like telematics or credit scores – that a person could never sift through alone. It can even draft an initial risk report with incredible accuracy by looking at past data and policies in the blink of an eye.

In practice, this helps create pricing that is fairer and more accurately reflects a person’s unique situation. Zurich, for example, used a modern platform to build a risk management tool that made their assessments 90% more accurate.

Suddenly, underwriting isn’t about looking in the rearview mirror anymore—it’s a living, breathing process that can adapt on the fly to new, complex threats like cyberattacks or the effects of climate change.

But this isn’t just about back-office wizardry. When deployed in the insurance industry, AI is completely changing the conversation between insurers and the people they serve. It’s allowing a move away from simply reacting to problems to proactively helping customers.

AI chatbots can offer 24/7 support, getting smarter with every question they answer. This lets the human team focus on the more difficult conversations. The real game-changer, though, is making things personal. 

By understanding a customer’s policy and behaviour, AI can gently nudge them with a renewal reminder or suggest a product that actually fits their life, like usage-based car insurance. It’s about showing customers you actually get them, which builds the kind of loyalty that’s been so hard to come by in an industry where over 30% of claimants feel dissatisfied, and 60% blame slow settlements.

This protective instinct also helps the whole system. AI is a brilliant fraud detective for the insurance industry and beyond, spotting weird patterns in data that a person would miss, and has the potential to cut fraud-related losses by up to 40%. It keeps everyone honest and protects the business and its customers.

What’s pouring fuel on this fire of change? A new breed of low-code platforms. They are the accelerators, letting insurers build and launch new apps and services much faster than before. In a world where customer tastes and rules can change overnight, that kind of speed is everything.

The best part of such tools is they democratise access and put the power to innovate into more hands. They allow regular business users – or ‘citizen developers’ – to build the tools they need without having to be coding geniuses. These platforms often come with strong security and controls, meaning this newfound speed doesn’t have to mean sacrificing safety or compliance, which is non-negotiable for an industry like insurance.

When you step back and look at the big picture, it’s clear that getting on board with AI isn’t just a tech project; it’s a make-or-break business strategy. Those who jumped in early are already pulling away from the pack, seeing things like a 14% jump in customer retention and a 48% rise in Net Promoter Scores. 

The market for this technology is set to explode to over $14 billion dollars by 2034, and some believe AI could add $1.1 trillion in value to the industry every year. But the biggest roadblocks aren’t about the technology itself; they’re about people and old habits.

Data, especially in an industry like insurance, is often stuck in old systems which stops AI from seeing the whole picture. To get past this, you need more than clever software. You need leaders with a clear vision, a willingness to change the company culture, and a commitment to training their people.

The winners in this new era won’t be the ones tinkering with AI in a corner—they’ll be the ones who lead from the top, with a clear plan to make it a part of their DNA. This will require an understanding that it’s not just about doing old things better, but about finding entirely new ways to bring value and build trust.

Learn more about how AI is rewriting the rules of the insurance industry at the upcoming webinar “From Complexity to Clarity: AI + Agility Layer for Intelligent Insurance” on July 16, 2025, at 7PM BST / 2PM ET. Industry experts from Appian and EXL will share real-world examples and practical insights into how leading carriers are implementing these technologies. Registration is available at the webinar link.

Featured speakers include:

• Vikram Machado, Senior Vice President & Practice Leader – Life, Annuities, Retirements & Group Insurance, EXL
• Vikrant Saraswat, Vice President – AI Consulting, EXL
• Jack Moroney, Enterprise Account Executive – Insurance & Financial Services, Appian
• Andrew Kearns, Insurance Industry Lead, Appian
• Michaela Morari, Senior Solution Consultant – Insurance & Financial Services, Appian

See also: UK and Singapore form alliance to guide AI in finance

Louis Vuitton has said the data of some UK customers has been stolen, as it became the latest retailer targeted by cyber hackers.

The retailer, the leading brand of the French luxury group LVMH, said an unauthorised third party had accessed its UK operation’s systems and obtained information such as names, contact details and purchase history.

The brand, which last week said its Korean operation had suffered a similar cyber-attack, told customers that no financial data such as bank details had been compromised.

“While we have no evidence that your data has been misused to date, phishing attempts, fraud attempts, or unauthorised use of your information may occur,” the email said.

The company said it had notified the relevant authorities, including the Information Commissioner’s Office.

The hack took place on 2 July, according to Bloomberg, which first reported the breach. It is the third breach of LVMH’s systems in the last three months.

As well as the two attacks on Louis Vuitton, LVMH’s second-largest fashion label, Christian Dior Couture, said in May that hackers had accessed some customer data.

On Thursday, four people were arrested as part of an investigation into cyber-attacks on Marks & Spencer, the Co-op and Harrods.

Those arrested were a 17-year-old British boy from the West Midlands, a 19-year-old Latvian man from the West Midlands, a 19-year-old British man from London and a 20-year-old British woman from Staffordshire.

M&S was the first retailer to be attacked, in April, in an incident that forced the closure of its online store for nearly seven weeks. The Co-op was attacked in the same month and forced to shut down parts of its IT system.

Harrods said on 1 May it had been targeted, and restricted internet access across its websites after attempts to gain unauthorised access to its systems.

The arrests came days after the M&S chair, Archie Norman, told MPs that two other large British companies had been affected by unreported cyber-attacks in recent months, as he gave details of the “traumatic” attack on the retailer.

Louis Vuitton has been approached for comment.