AI in Insurance Industry Statistics 2026: Adoption, Funding and Trust

Some 169 of 193 auto insurers, or 88.6% of reporting companies, currently use, plan to use, or plan to explore AI/ML, according to a National Association of Insurance Commissioners (NAIC) survey. AI-focused companies took 99.1% of Q2 2026 InsurTech funding, per Gallagher Re. Those figures anchor the AI in insurance industry statistics below, drawn from regulator data calls, an SEC filing, and dated 2026 industry surveys.

In the Bank of England’s UK survey, the insurance sector reported the highest percentage of firms currently using AI, at 95%. Customers are less convinced. Hi Marley found that 85% of insurance executives expect AI to strengthen customer trust, while just 40% of policyholders agree.

Key Takeaways

• Life insurers reported 58% (94 of 161 companies), against 88% for auto and 70% for home, even though the life survey counted GLMs and GAMs as AI.
• Just 76 of the 179 life insurers that issued the survey, or 42%, answered that they currently use AI/ML.
• The AI share of InsurTech funding was 74.8% in Q3 2025, then 99.1% in Q2 2026, while early-stage funding moved 51.8% quarter-on-quarter, from $548.0 million to $264.19 million.
• Only 22% of US consumers would feel comfortable with AI filing a claim on their behalf, though 39% now say it is a good idea for their insurance company to use AI.
• 12% of health insurers use AI for denying prior authorizations, and 14% use it to infer sensitive data, such as race.
• A review of 76 insurer and reinsurer filings found zero mentions of synthetic media, synthetic identity, or voice cloning.
• Lemonade reported a record-low LAE ratio of 5%, against industry-average LAE ratios of approximately 9%.

Editor’s Choice

• Auto insurers using or exploring AI: 88.6% of 193 companies.
• Health insurers using AI/ML: 84% of 93 companies surveyed by 16 states.
• UK insurers using AI (2024 survey): 95% of responding insurers in the 2024 BoE/FCA survey, the highest of the financial sectors surveyed.
• European insurers using generative AI: nearly two-thirds of 347 undertakings across 25 countries.
• Q2 2026 InsurTech funding: $2.44 billion.
• AI-focused InsurTech funding, Q2 2026: $2.42 billion, comprising 99.1% of the quarter’s total.

AI in Insurance Industry Statistics by Line of Business

• 169 of the 193 auto insurers currently use, plan to use, or plan to explore using AI/ML.
• 136 of 194 home insurers currently use, plan to use, or plan to explore using AI/ML.
• 94 of 161 life insurers reported the same, and the life survey intentionally includes GLMs and GAMs as AI models, in contrast to the auto and home surveys.
• 55% of health insurers use third-party components in their AI/ML systems, and 15% rely entirely on third-party AI/ML solutions.
• Only 10% of health insurers develop AI/ML solutions internally, while 13% use a combination of internal and third-party components.

Source: NAIC Private Passenger Auto (2022), Home (2023), Life (2023) and Health (2025) AI/ML Surveys

The life survey counts simpler statistical models that the auto and home surveys left out, yet still trails both. The US auto insurance market data shows the premium base behind the top line.

About This Data

Compiled from 23 sources: 14 from regulators and official bodies (NAIC, Bank of England, EIOPA, the Bureau of Labor Statistics, and an SEC filing) and 9 industry reports and company releases. Source publication dates run from December 2022 to September 2026. Only regulator data, company filings, industry funding trackers such as Gallagher Re and surveys with a stated methodology qualified. Figures are updated when sources publish new editions.

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How has AI impacted the insurance industry?

AI now sits inside claims handling. According to the Bureau of Labor Statistics, technology is expected to automate some of the tasks claims workers perform, and computer software can evaluate photographs of damaged property and calculate an estimated claim amount. Lemonade says advances in AI and automation across its claims operation have enabled it to absorb substantial growth with minimal incremental claims handling expense.

AI Use in Insurance vs Other UK Financial Sectors

• A further 10% of firms that responded to the 2024 survey planned to use AI over the next three years.
• The 2022 survey showed 58% of firms using AI and a further 14% planning to do so.
• Respondents expect the median number of use cases to more than double over the next three years, from 9 to 21.
• Financial market infrastructure firms were the sector with the lowest percentage of firms currently using AI.

Insurance led the sectors that responded to the 2024 survey, and the UK insurance market figures show the size of the market those firms serve.

Recent Developments

• September 24, 2026, Hi Marley reported that only about half of policyholders are mostly or completely confident their insurer will use AI responsibly.
• September 3, 2026, Clearspeed released research that draws on a review of 76 public filings from 49 insurers and reinsurers, 31 industry studies, and 16 interviews with claims and underwriting leaders.
• August 6, 2026, Gallagher Re’s second-quarter report showed that (re)insurance companies backed 27 tech investments, with 51.9% of them as early-stage deals.
• August 5, 2026, the NAIC’s 28-day public comment period ended on the Regulatory Framework for Third-Party Data and Model Vendors, Property and Casualty Pricing and Underwriting Data and Models.
• July 29, 2026, Lemonade reported that In Force Premium grew 32.4% to $1.43 billion, its 11th consecutive quarter of acceleration.

AI Adoption Among European Insurers

• In EIOPA’s generative AI survey, nearly two-thirds of undertakings are already actively using the technology, though most are still at a proof-of-concept stage.
• 64% of reported Gen AI use cases target back-end productivity tools, and 36% reported the development of customer-facing Gen AI applications such as voice or chatbots.
• 49% of undertakings in the sample have developed dedicated AI policies, up from only a quarter in 2023.
• In EIOPA’s 2024 digitalisation report, almost 80% of respondents outsource cloud computing data storage to BigTech cloud services.
• More than half of respondents cited enhancing the customer experience as a key driver, beyond efficiency and cost cutting.

Key finding: In EIOPA’s February 2026 report, responses from 347 undertakings across 25 countries showed nearly two-thirds already actively using Gen AI, with most still at a proof-of-concept stage. A supervisor measuring adoption this early signals that governance will be examined alongside deployment speed.

How Home Insurers Use AI by Function

• Home insurers use AI/ML claims models mostly for subrogation and claims triage (44 companies each) and evaluation of images of loss (36).
• Just 2 companies use AI/ML claims models to determine the settlement amount.
• A couple of companies are researching how they might use AI/ML claims models for claim approval and claim denial.
• The top two reasons for not using AI/ML were no compelling business reason and waiting for regulatory guidance.

In the 2023 home survey, AI/ML rarely set settlement amounts, and the AI claims statistics track how that split is moving.

How Health Insurers Use AI

• 84% of the 93 health insurers surveyed use AI/ML across product lines, including Individual Major Medical, Group Major Medical, and Student Health Plans.
• Only about 4% of health insurers are using AI/ML to detect smoking.
• 12% of companies use AI for denying prior authorizations.

AI Use in Life Insurance by Function

• Of 179 life insurers issued the survey, 16 were exempt, and 163 were subjected to three screener questions.
• 67 companies answered no to using, planning, or exploring AI/ML, or 37% of surveys issued.
• 48 of those 67 companies (72%) cited no compelling business reason.
• 31 companies (46%) each cited lack of resources and expertise and reliance on legacy systems requiring IT, data, and technology upgrades.

Life carriers point most of their models at selling and underwriting, and the US life insurance data shows how large that sales engine is.

InsurTech Funding by Quarter

• Global InsurTech funding rose 19.5% year on year, from $4.25 billion in 2024 to $5.08 billion in 2025, marking the first annual increase since 2021.
• P&C InsurTech funding increased 34.9% year on year to $3.49 billion in 2025.
• InsurTech saw just 76 deals in Q3 2025, the lowest count since Q2 2020.
• Average deal sizes climbed 23.3% quarter-on-quarter in Q1 2026.
• The 162 venture investments in tech among (re)insurance companies in 2025 were a record high.

The insurtech market statistics set these quarterly totals inside the longer insurtech funding cycle.

AI Share of InsurTech Investment

• InsurTechs relevant to AI liability and cyber insurance raised over $440 million in Q1 2026.
• Early-stage deal count reached 54 deals in Q2 2026, even as early-stage funding came to $264.19 million.
• Q1 2026 saw only the sixth early-stage InsurTech on record to raise a nine-figure mega-round.

By the numbers: Gallagher Re counted $2.44 billion of global InsurTech funding in Q2 2026, and 99.1% of Q2 funding flowed to AI-focused companies. That share sits 24.3 points above the Q3 2025 level. For founders, an AI product is now close to a precondition for raising capital in this sector.

Insurance Executive AI Survey Results

• 56% of executives favor a gradual approach to generative AI that keeps human intervention in place for at least the next three years, per Earnix.
• 83% plan to increase investment in third-party data in the next three years, and 39% say data security and privacy settings are the most significant challenge affecting AI adoption.
• In the AM Best survey, 63% of respondents who implemented AI reported a small improvement in workforce productivity and satisfaction, with 11% reporting a significant improvement.
• Nearly 20% agree or strongly agree that their organization is at an advanced stage of implementation.

Source: Earnix 2026 Insurance Trends Report (June 2026), AM Best AI Survey (April 2026)

Is AI going to take over the insurance industry?

Survey data points to AI working alongside staff for now. In AM Best’s survey, 31% of respondents said there would not be any material change to staffing, with 37% expecting employees to be redeployed to higher-value work. Approximately two-thirds seek to increase their AI investment in the next 12-24 months.

AI Regulation in Insurance

• The NAIC’s map, with status as of April 1, 2026, lists 25 adopting jurisdictions for its AI model bulletin, 24 states and one district.
• California, Colorado, New York, and Texas appear under insurance-specific regulation or guidance.
• Per Earnix, 92% of insurers conduct formal AI governance reviews with a regular cadence, but fewer than one in three executives strongly agree those reviews are sufficient to keep pace with regulatory demands.
• 38% cite regulatory and legal exposure as their primary ethical concern in AI deployment.
• A majority of AM Best respondents said their company has a formal AI policy in place.

The next layer targets the vendors behind P&C pricing models.

Consumer Comfort With AI in Insurance

• 84% of consumers now use AI tools at least occasionally, and 27% report using AI daily, per Insurity.
• In 2026, 39% of consumers say it is a good idea for their insurance company to use AI to improve services, nearly double the 20% who expressed support in 2025.
• The share less likely to purchase a policy from an insurer that publicly used AI declined from 44% to 36%.
• Only one-third say they trust AI-driven insurance decisions, while 26% report needing more information before forming an opinion.

Insurer and Policyholder Trust Gap on AI

• Two-thirds of policyholders said their biggest concern is the fear of not being able to reach a human when it matters.
• Hi Marley surveyed 550 senior P&C insurance decision-makers and 2,000 policyholders across the U.S. and Canada.
• Roughly two-thirds of policyholders say they would trust AI-delivered answers to general insurance questions or coverage details.

Source: Hi Marley, The State of AI in P&C Insurance Communication 2026 (September 2026)

Why it matters: Trust drops to just 45% for information needed to file a claim correctly, from roughly two-thirds for general insurance questions or coverage details. Carriers that put AI first in claims start at a step where policyholder trust drops, so a clear route to a human adjuster matters there.

AI Claims Automation Results at Lemonade

• Lemonade says revenue grew 79% to $294 million, reflecting the impact of its reinsurance transition and higher premium retention.
• The gains included record-low LAE ratios across Homeowners Multi-Peril, Car, and Pet during the quarter.
• The company cites higher instant claim rates in Pet and Renters and expanded AI-assisted workflows.
• At the industry-average ratio, incumbents are spending almost twice as much of their customers’ premiums on handling claims.

Source: Lemonade Shareholder Letter Q2 2026 (July 2026)

The ratio is company-reported and covers claims handling cost only; the Lemonade premium and loss ratio data show underwriting results.

AI Fraud and Deepfake Risk in Insurance

• Alchemy Crew Ventures researchers searched 76 annual reports, 10-K filings, proxy statements, and statutory returns from 49 insurers and reinsurers for a dozen terms related to AI-generated and manipulated evidence.
• Just six of 49 companies mention deepfakes, and only as a cybersecurity concern, never in connection with evidence used in claims or underwriting decisions.
• Five of the world’s top 10 reinsurers were analyzed, and none mention deepfakes, synthetic media, or AI-generated evidence in their most recent annual reporting.

The costliest insurance fraud cases we have catalogued show the scale of losses at stake if AI-generated evidence goes undetected.

Insurance Jobs and AI

• Insurance underwriters use automated software to determine the risk of insuring applicants and review recommendations from underwriting software.
• Employment of insurance underwriters is projected to decline 4% from 2025 to 2035, with about 6,800 openings projected each year.
• Employment of insurance sales agents is projected to grow 3% from 2025 to 2035, with about 43,100 openings projected each year.
• Employment of claims adjusters, appraisers, examiners, and investigators is projected to decline 6% from 2025 to 2035, while AI capabilities will continue to increase and make workers more productive.

Source: BLS Occupational Outlook Handbook, 2025-35 projections

Are insurance jobs at risk from AI?

Some insurance roles are shrinking, but hiring continues. According to the Bureau of Labor Statistics, about 21,600 openings for claims adjusters, appraisers, examiners, and investigators are projected each year, on average, over the decade. Underwriters already review recommendations from underwriting software as part of the job.

Are insurance agents likely to be replaced by AI?

BLS projections point the other way. Employment of insurance sales agents is projected to grow about as fast as the average for all occupations over the decade. That projection covers the whole occupation, not only agents at carriers that have adopted AI tools.

Conclusion

AI adoption in insurance is broad but uneven. 88.6% of reporting auto insurers use, plan to use, or plan to explore AI/ML, while life insurers sit at 58%, and 99.1% of Q2 funding flowed to AI-focused companies. Regulators, investors and executives have moved faster than policyholders, whose trust still trails the technology at the claims step.

The next test is supervisory. The NAIC’s third-party framework would extend oversight to the vendors behind pricing and underwriting models, and insurers that can explain those models to regulators and customers will be better placed as the rules take shape.