As insurers have entered the AI age, they’ve often regarded the technology as something like a hot new phone app: They know they want it, but they are still figuring out the best way to use it. For 2026, industry experts foresee a breakthrough year in which AI will become central to how insurers operate—no longer as an accessory, but as the business’s operating system, powering functions from underwriting to claims decisions.
The Death of the Legacy Admin System?
“A Fortune 500 insurer will begin phasing out policy admin systems in favour of insurance copilots in 2026,” says Franklin Manchester, Principal Global Insurance Advisor at SAS. While these systems traditionally required massive upkeep, interactions with data through AI copilots can now eliminate the need for manual intervention to underwrite policies or settle claims.
Closing the Protection Gap
Stu Bradley, Senior Vice President of Risk, Fraud & Compliance Solutions, notes that insurers will lean harder into AI-powered actuarial modeling. “The opportunity is twofold: meaningful progress in narrowing the industry’s $1.8 trillion protection gap and greater resilience in the face of escalating climate risk and economic volatility.”
Relationship-Based Underwriting
The shift is also changing the “human” side of the business. Oana Avramescu, Senior Manager of Insurance Industry Consulting, predicts that underwriting will move from rule-based to relationship-based AI. This turns underwriting into an ongoing dialogue between models and customers, recalibrating risk dynamically as lifestyles evolve, rather than relying on static, once-a-year rules.
The Rise of Agentic AI in Claims
“Many straightforward insurance claims will be settled in minutes by agentic AI,” explains Alena Tsishchanka, Global Customer Advisory Director. However, she warns that this speed requires robust AI governance to safeguard customer trust and minimize risks like accidental bias or cyberattacks. “Building systems that act fast—and act right—will define the leaders of the next decade.”
Specialized Tools vs. End-to-End Solutions
Finally, Thorsten Hein and Nick Feast highlight a move toward “best-of-breed” individual AI tools rather than all-encompassing solutions. As fraudsters use AI to create increasingly sophisticated false identities, insurers are seeking specialized tools to augment their current detection efforts, allowing investigators to do more with less through the use of AI agents.
Originally published by iAfrica.com| Contributed by SAS Industry Experts
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