AI adoption outpacing insurance governance frameworks, Willis warns
Artificial intelligence is being embedded across insurance operations faster than governance frameworks can manage, creating accountability gaps that are reshaping how risk is created and distributed, according to new research from Willis.
More than 700 million people now use leading AI systems weekly, with the technology woven into underwriting, claims processing, cyber defence, customer interactions and executive decision-making. The Willis Risk and Resilience review found the central challenge is no longer whether to adopt AI, but whether organisations can do so responsibly.
Spike Lipkin, chief AI officer at Willis, said the speed of adoption creates structural vulnerability. "AI is already reshaping the risk landscape in real time, but many organisations are moving forward without fully understanding the systems they rely on," Lipkin said. "That creates a dangerous gap between innovation and oversight."
Market fragmentation on coverage
The report identified a significant divergence in how insurers and brokers are responding to AI risk. Some continue relying on traditional policy wording and "silent AI" assumptions-language that neither explicitly includes nor excludes AI-related losses. Others are introducing affirmative AI cover and tightening underwriting requirements tied to governance frameworks.
Gallagher's 2026 research found one in five insurance professionals reported their insureds had already experienced losses linked to AI risk, yet most policy wordings were never designed with AI liability in mind. Coverage ambiguity spans cyber liability, professional indemnity, errors and omissions, employment practices liability, product liability and directors and officers insurance.
Between January 2025 and January 2026, the professional liability market shifted from silent AI coverage to explicit affirmative warranties or absolute exclusions. Firms entering 2026 without documented AI governance frameworks now face coverage denials at renewal.
New products and policy changes
Product innovation is beginning to address the gap. In April 2025, Armilla Insurance Services launched an AI liability policy underwritten at Lloyd's offering affirmative coverage for AI-related risks including hallucinations and model performance deterioration.
Google announced a partnership with Beazley, Chubb and Munich Re to offer affirmative AI coverage embedded within Google Cloud services. A new ISO form effective January 2026 allows carriers to exclude bodily injury, property damage and advertising injury arising from generative AI from standard commercial general liability policies.
Where 2025 discussions centred on exploring and testing AI, 2026 perspectives focus on deploying and scaling. This shift makes the governance questions more urgent, not less.
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