WTW Survey Highlights Growing AI and Analytics Adoption by Insurers

WTW's report, Advanced Analytics: Turning Promise into Profit, examines how property and casualty insurers in the United States and Canada are adopting advanced analytics and artificial intelligence (AI) across underwriting, pricing, claims, reserving, and operations. According to the report, advanced analytics and AI are increasingly viewed as essential capabilities for insurers seeking to remain competitive in a rapidly changing market.

The report found that insurers with more advanced analytics capabilities achieved stronger financial performance between 2022 and 2024. Per WTW, insurers classified as "leaders" reported combined ratios 6 percentage points lower and premium growth 3 percentage points higher than "learners," suggesting a positive relationship between analytics maturity and profitability.

WTW said advanced analytics adoption is now widespread in underwriting and pricing functions. The report noted that nearly 80 percent of surveyed insurers currently use risk pricing models such as generalized linear models (GLMs), making predictive pricing models close to universal across the industry.

According to the report, insurers are also expanding analytics use in risk assessment, catastrophe modeling, and customer demand analysis to support underwriting and pricing decisions. WTW noted that adoption rates are particularly high among larger insurers and personal lines insurers.

The survey identified continued expansion plans for underwriting automation and workflow management. Per the report, insurers are increasingly investing in analytics-driven triage capabilities and straight-through processing to improve underwriting efficiency and automate routine risks over the next several years.

Claims analytics adoption remains less mature than underwriting analytics, according to WTW. The report found that many insurers still have limited claims analytics capabilities in production today, although claims functions are becoming a growing area of investment and competitive differentiation.

WTW said current claims analytics applications are most commonly focused on fraud detection and future claim severity prediction, with roughly one-third of insurers currently using advanced analytics in those areas. According to the report, insurers are also increasing investments in claims automation and workflow optimization to reduce costs and improve operational efficiency.

Beyond underwriting and claims, insurers are gradually expanding analytics into reserving, expense management, marketing, and distribution functions. Per WTW, reserving analytics adoption continues to increase, while insurers are also exploring analytics to improve customer segmentation, acquisition strategies, and agent and broker performance management.

The survey also highlighted growing use of AI and machine learning techniques. According to the report, more than half of respondents already use large language models and generative AI, while many others expect to adopt the technologies within the next 2 years.

WTW said insurers are increasingly applying AI to improve operational productivity, including assisting with coding, reducing manual workloads, and strengthening decision-making processes. The report found that about two-thirds of respondents currently use AI to assist with writing or debugging code.

The report identified several barriers slowing broader analytics adoption. According to WTW, data quality concerns and IT bottlenecks were among the most commonly cited challenges preventing insurers from expanding their use of advanced analytics, alongside budget prioritization and infrastructure limitations.

WTW also noted organizational and talent-related challenges. Per the report, many insurers continue to face difficulties related to analytics strategy development, employee training, talent shortages, and integrating analytics expertise into broader business operations.

Looking ahead, the report projected broader deployment of advanced analytics and AI across underwriting, claims, and customer service functions. According to WTW, insurers are expected to move rapidly from experimentation toward scaled investment in AI and machine learning initiatives over the next 2 years.

The report concluded that advanced analytics and AI are becoming foundational capabilities across the insurance sector.