US Insurers Split On AI Adoption, Most Plan To Boost Budgets: Wipro

There is a clear divide in how US insurance companies are adopting artificial intelligence, with 54% still in the exploratory phase with limited usage, while 46% are at an advanced stage of implementation, Wipro Ltd. said in a report on Thursday.

The findings are based on a survey of 100 business leaders from US insurers with annual revenue of over $500 million.

Most insurers plan to increase their AI budgets to 20% of overall tech spending over the next three to five years, up from the current 8%, the report said.

Around 92% of respondents agreed that AI is essential to stay competitive in areas such as customer experience and personalisation. However, 69% flagged concerns about high upfront costs and uncertain returns, especially when integrating AI with legacy systems.

Underwriting has emerged as a key area for AI deployment, given the technology’s ability to process vast amounts of structured and unstructured data. While all insurers surveyed are working to integrate AI into their underwriting process, fewer than half have implemented it extensively so far.

About 41% of respondents said they are encouraging collaboration between underwriters and AI specialists. Meanwhile, 47% are focusing on hiring and upskilling talent to prepare for an AI-first future.

Integration issues remain a major challenge, with 71% citing problems merging AI with legacy systems. To address this, 65% of firms are adopting a phased rollout approach, the report said.