‘An imperative, not a magic pill’: Study finds insurers looking to build trust, value in AI

The insurance business is built on trust. Likewise, AI cannot work without trust; users and consumers have to believe that it's providing accurate answers based on sound data. But as a new SAS report shows, trust in AI is a tricky subject, with users placing more trust in generative AI than traditional AI but not always investing in the governance to ensure that trust is warranted.

As the industry enters a year in which many expect AI to produce a spike in business value, insurers face an inflection point: AI adoption is accelerating, but businesses must address questions around governance and data maturity before they can realize its full potential.

With an eye toward the coming year, industry experts from SAS, Amazon Web Services (AWS) and Economist Impact will present a live webinar Feb. 4 - 2026 Insurance Trends: Risks, Disruptions & What Comes Next - to discuss the forces reshaping insurance.

"Our research shows the insurance industry in line with other sectors - if not slightly ahead of them - in terms of delivering trustworthy AI," said Kathy Lange, Research Director of the AI and Automation Practice at IDC. "However, when it comes to the level of maturity of AI and data infrastructures, insurers lag behind."

"AI is an imperative for businesses, but it's not a magic pill," added Franklin Manchester, Global Insurance Strategic Advisor at SAS. "For AI to generate value throughout the enterprise, it needs to be supported by talented people and fueled with robust, connected data. The insurers who can infuse AI into their existing operations - and who establish the governance necessary to deliver safe and responsible AI at scale - will have a competitive advantage for growth, innovation and creating value for their customers."

Insurers taking measured approach to AI

The Data and AI Impact Report: The Trust Imperative- an IDC report commissioned by SAS - reveals a number of themes indicating that the insurance industry, at least compared to other sectors, is taking a cautious, deliberate approach to adopting AI:

Modest overall AI maturity. The report notes that, among the four industries analyzed (the others being government, life sciences and banking), "insurance presents the most modest profile in terms of both AI and data infrastructure maturity." Only 7% of insurers consider themselves "transformative" - the lowest of all industries. And 14% remain siloed in their data infrastructure, slowing innovation and limiting enterprisewide adoption.

Conservative investment profile. About 8% of insurers expect to increase their AI spending by at least 20% in the next year, with nearly 60% saying they expect an increase of between 4% and 20%. About one-third said they expected an even smaller increase (3% or less), if not an outright decrease in investment.

Trust gaps. Only 9% of insurers combine a high level of trust in the technology with strong trustworthy AI capabilities. Over 40% fall into the categories of either underutilization (low trust in reliable systems) or overreliance (high trust in unproven systems).

Challenges to AI modernization. Over half of insurance respondents (51%) said their organization lacked effective data governance, and the same percentage said their data foundations were not centralized or optimized. Almost as many (44%) also perceived a shortage of specialized AI talent.

The move toward AI value

As insurers move toward AI maturity, expect to see them focus on the uses that generate the most value - which are those that drive growth. The study found that cost-reduction measures produce the lowest return of any AI use. The bigger opportunities include improving customer experience, expanding market share and strengthening resilience.

"Making processes more efficient is still important," said Manchester. "But the most competitive insurers will focus on using AI for innovation to drive premium growth through outstanding customer experiences."

Executive webinar: 2026 Insurance Trends

Registration is open for the Feb. 4 insurance trends webinar. The live discussion will offer insights into the trends that will shape the insurance industry over the next year and beyond, along with guidance for how to build trust, increase profitability and improve performance. In addition to SAS' Manchester, panelists will include:

Pratima Singh, Principal, Policy and Insights Team - Economist Impact.

Sri Raghavan, Principal for Data and AI Enterprise Strategy - AWS.

The group will discuss some of the most timely trends and topics facing insurers, including agentic AI; adversarial AI; economic instability; and volatility from climate change, geopolitics, regulation and technological evolution.