Insurers find AI success hinges on governance rather than cost cutting

The insurance sector currently leads other industries in its strategic commitment to artificial intelligence, yet a sharp divide remains between those who effectively manage the technology and those who do not. Organizations that invest in auditability and clear responsible AI policies are seeing significant returns, with 59% of these leaders expecting high ROI. In contrast, laggards—defined by poor governance and a focus on cutting staff costs—report virtually zero strong return on investment.

Franklin Manchester, Global Strategic Insurance Advisor at SAS, warns that using AI primarily to reduce headcount signals a lack of core strategy. Instead, the most productive firms are leveraging the technology to improve customer experience and expand market share. Despite this growth, human oversight remains a critical check. Nearly 80% of organizations across sectors continue to override more than 10% of AI-generated decisions, often due to a lack of transparency or concerns regarding factual accuracy. With 8% of overrides triggered by safety fears, the industry faces a delicate balance between scaling automated speed and maintaining the human trust necessary to ensure those decisions remain sound.