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The insurance industry is the least likely to consider itself “advanced” in AI, according to a recent report by EPAM Systems.

Despite rising AI investment across all business sectors, insurers are struggling to scale the technology, the data showed, citing data protection, security, and talent gaps as major hurdles. The insurance sector also has the highest share of beginners in AI.

“Most insurers have focused their AI investments to date on document intake processes, document interrogation and summarization, writing assistance and embedded chat copilots,” EPAM System’s Global Insurance Advisory Lead, Gail McGiffin, told PropertyCasualty360.

“These investments have primarily delivered proofs-of-concept that seem promising in terms of cost and time savings,” she added. “Yet, few have been operationalized within a business function to scale the efficiency benefits. While investments have crossed the insurance value chain, the greatest use case traction has been in underwriting, policy servicing and claims. What is still lacking is the use of AI and GenAI to improve the effectiveness of key decision-making activities in underwriting and claims, which will yield the greatest business impact in the areas of risk assessment and claim evaluation and improve profitability.”

Other industries in the study include automotive and manufacturing, education and business information services, energy, financial services, retail and consumer packaged goods.

Key findings from the EPAM report include:

  • Acceleration of AI investments: Companies plan to increase their AI spending by 14% year- over-year in 2025, signaling a continued commitment to AI-driven growth.
  • Scaling AI remains a challenge: While 30% of technology-advanced companies have successfully implemented AI at scale, many organizations struggle to bridge the gap between experimentation and enterprise-wide deployment.
  • AI’s direct impact on business: Disruptors attribute 53% of their expected 2025 profits to AI investments, which demonstrates a tangible financial impact for the market leaders.
  • Governance and security trail AI growth: Businesses anticipate a minimum of 18 months to implement effective AI governance models, highlighting the complexity of aligning AI with the rapidly evolving regulatory landscape.
  • AI talent remains a priority: 43% of all companies surveyed plan to hire AI-related roles throughout 2025, with machine learning engineers and AI researchers being the most in-demand positions.

Meanwhile, the global AI in insurance market is experiencing substantial growth and is projected to reach $10.27 billion in 2025, attributed to data explosion, risk assessment and underwriting, fraud detection and prevention, customer experience enhancement, operational efficiency and cost reduction.

“AI enables real-time resolution for up to 70% of simple claims through end-to-end automation,” said Joe Khoury, managing director and partner on the insurance practice at Boston Consulting Group.

“Technologies such as computer vision, natural language processing and machine learning allow insurers to assess damage, validate coverage, detect fraud and issue payments in minutes—reducing operational costs by 30% to 50%,” he added. “These systems also improve fraud detection, using behavioral analytics and anomaly detection to flag suspicious patterns early. As a result, AI-driven claims platforms are not just faster—they’re more secure.”

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