Insurance companies struggle to turn AI spending into measurable returns
More than four in five insurance companies spend at least $5 million annually on AI, yet most remain stuck in the pilot phase because they cannot connect investments to financial results, according to an April report from Simplifai, an agentic AI platform.
The report, which analyzed industry data from McKinsey, EY, and Deloitte, found that finance teams lack clear metrics to measure AI ROI. This inability to demonstrate returns keeps projects from moving into production at scale.
The strategy gap
The core problem isn't access to technology. Every carrier can purchase the same AI models and platforms. The difference lies in execution.
According to Simplifai CEO Artem Gonchakov, "Most carriers have AI projects. Few have an AI strategy. The difference determines whether AI produces scattered productivity gains or compounding competitive advantages."
Fewer than half of insurance businesses have deployed AI in a single function. Production-scale deployments remain rare. Current AI use cases focus primarily on customer service chatbots and document summarization, with end-to-end workflow automation in underwriting or claims being the least common deployment.
A broader ROI challenge
The insurance industry's struggle reflects a wider pattern. U.S. tech leaders plan to spend $207 million on AI in the next 12 months-nearly double last year's amount-yet only a fraction are scaling fast enough to drive measurable returns.
TE Connectivity's 2026 Industrial Technology Index identified another obstacle: misalignment between executives and technical staff on what ROI actually means. Only 19% of executives reported having "full clarity" on AI ROI.
Agentic AI shows different results
Insurance companies deploying agentic AI-a more advanced form of AI that can manage multi-step workflows independently-reported 30% to 40% productivity gains in claims and underwriting operations.
Nearly 45% of IT executives believe agentic AI will have greater impact than generative AI. More than three in five IT decision-makers anticipate agents will eventually yield more than 100% ROI.
The path forward
The distinction between successful and stalled AI initiatives comes down to approach. Companies that start with workflow requirements and build governance from the beginning see results. Those that begin with model selection and treat integration as an afterthought typically remain in pilot mode.
Learn more about AI for Executives & Strategy and AI for Insurance to understand how to structure AI deployments for measurable impact.
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