Insurance organizations are continuing to expand their use of artificial intelligence (AI), but new research suggests many are still struggling to align technology investments with workforce development and operational readiness.
Those findings come from Covenir's 2026 Insurance Operations Leaders Trends Report, which surveyed 152 insurance operations decision-makers from carriers, managing general agents (MGAs), and insurtechs. The report found that while confidence in the industry's future remains high and AI adoption continues to accelerate, many insurers are simultaneously dealing with workforce strain, training gaps, and difficulties turning data into meaningful business decisions.
According to the survey, 70% of respondents reported having AI deployed in live operations, up from 58% a year earlier. At the same time, nearly one in five organizations indicated they are reducing training budgets, raising concerns about whether employees are receiving the support needed to work effectively alongside emerging technologies.
David Squibb, president and CEO of Covenir, said organizations are beginning to realize tangible benefits from AI, although those benefits vary depending on the maturity of their deployments.
"What's interesting is that the benefits look different depending on where a company is in that journey," Squibb said. "If they're in early stages, running AI in one function, the biggest payoff reported is customer satisfaction, followed by reduced handling time."
As AI becomes integrated across multiple operational functions, the benefits become more substantial, he said.
"Claims resolution improves, and you start to see staffing cost reduction show up as a measurable outcome," Squibb said. "That's not something that happens early. It takes time to get there."
While AI investments are increasing, the report suggests many insurers may be underestimating the importance of workforce development. Squibb said the growing use of AI actually increases the need for employee training rather than reducing it.
"AI is changing the way jobs are done and actually raises the bar for what people need to know to do their jobs well in the near term," Squibb said. "In a strange way AI is more of an argument for training, not less."
The issue is particularly important as experienced employees retire and organizations rethink how new workers develop industry knowledge. Skills that were once learned gradually through on-the-job experience may increasingly require formal training programs supported by AI-enabled tools and coaching systems.
The survey also revealed a disconnect between growing budgets and employee workloads. Nearly seven in 10 organizations reported budget increases, yet many operations leaders said their teams are more stretched than ever. The challenge appeared especially pronounced among mid-sized carriers, which reported both significant budget growth and some of the highest levels of workforce strain.
"More investment didn't translate to less pressure," Squibb said. "The pattern that keeps showing up is that the organizations under the most strain are trying to do a lot of things at once without necessarily giving people what they need to manage through it."
Another major concern identified in the report involves data utilization. Although more than eight in 10 respondents said operational insights are critical to business success, nearly half reported they either are not fully using their data or struggle to convert information into actionable decisions.
Squibb said many insurers have invested heavily in dashboards and reporting tools but still face challenges understanding what the information actually means for the business.
"Having data isn't the same as having answers," Squibb said. "Most organizations have dashboards, not insights. A dashboard shows you what happened. But unless you have a business intelligence team sitting behind it interpreting the numbers, the 'why' stays buried."
He pointed to a recent example involving a Florida carrier whose performance metrics appeared healthy even though customers and agents were expressing frustration. After a deeper analysis uncovered the root cause of the problem, a simple change to a call script significantly improved the customer experience.
"They had data before. They just didn't have the insight underneath it," Squibb said. "That's the gap this report is pointing at, and I think it's more common than the industry wants to admit."
Maura Keller is a Minnesota-based freelance writer and editor.
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