Around 80% of insurers are experimenting with AI, yet fewer than 5% have use cases live in production. The majority of projects stall at proof-of-concept, stuck in perpetual pilot mode. The reasons go beyond technology—they reflect governance, culture, regulation, and legacy infrastructure.
The Four Major Roadblocks to AI in Insurance
1. Governance gaps
Most insurers lack the organisational structures to effectively govern AI initiatives. Without clear frameworks for development, testing, deployment, and oversight, promising pilots rarely progress to production. Larger insurers have begun to build governance models, but many others still lack both the frameworks and the specialised talent to manage AI safely at scale.
2. Legacy system integration
Insurance still runs on decades-old systems not designed for modern APIs. Integrating AI with these platforms is often prohibitively complex. Even when pilots show value, connecting them to core systems where data lives and business happens remains a critical blocker.
3. Regulatory uncertainty
The insurance sector is heavily regulated, yet UK frameworks around AI remain vague compared to the EU. This leaves insurers uncertain about compliance risks, especially for customer-facing applications where biased or inaccurate outputs could create liability.
4. Talent shortages
Insurance struggles to attract the technical talent needed for AI transformation. Many professionals with advanced AI skills prefer to work in banking or technology, not insurance. This forces insurers to depend heavily on external partners—an arrangement many COOs find unsustainable without some internal expertise.
Breaking Through the Pilot Barrier
Start with point solutions, not enterprise transformation
Rather than trying to overhaul entire enterprises, insurers are finding success by targeting high-value workflows—claims document processing, underwriting summarisation, or triage—where impact is visible and integration demands are manageable.
Prioritise document processing for early wins
Document summarisation and extraction consistently deliver quick ROI. Automating submission review allows underwriters to evaluate more risks with the same headcount—unlocking business that would otherwise be lost to capacity constraints.
Adopt human-in-the-loop models
AI alone is not enough. Sustainable implementations ensure human oversight at critical decision points. This not only mitigates regulatory and compliance risks but also builds trust among staff and customers.
Use partners strategically, but build internal expertise
External partners can accelerate early wins, but COOs want in-house oversight to ensure alignment with risk and security frameworks. Successful organisations balance the two—leveraging partners for specialised skills while building their own AI capabilities over time.
Low-risk, high-impact use cases
For insurers looking to move from pilots to production, these workflows offer the best combination of feasibility and value:
Document Processing & Summarisation – Automates submission reviews, enabling underwriters to analyse risks at scale.
Risk Memo Generation – Reduces admin load by drafting standardised documentation.
Claims Processing Efficiency – Improves both profitability and customer satisfaction where relationships are truly tested.
Compliance and Due Diligence – AI accelerates verification, fraud detection, KYC checks, and sanctions screening with clear audit trails.
The Path Forward
The gap between experimentation and production is significant—but not insurmountable. Insurers that prioritise targeted, proven workflows, invest in governance, overcome integration challenges, and build internal expertise are already achieving measurable ROI.
For COOs, the lesson is clear: the technology is ready. What determines success is organisational readiness and execution. Those who act now will secure competitive advantage in efficiency, risk assessment, and customer experience—while others remain stuck in pilot mode.
Want to see this in action? Download our COO guide on Operational Excellence Through Proven AI or book a free consultation meeting !
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