S&P: governance to decide AI winners among insurers

S&P Global Ratings' survey covered 121 rated re/insurance entities globally, representing roughly 38% of the total assets it rates in the sector. S&P analyst Andreas Lindberg said the survey shows AI is being used to improve customer experience, underwriting, risk management, and claims processing, with operational benefits appearing earlier than financial gains. Governance infrastructure is already widespread, with nearly all insurers surveyed having established or developing formal frameworks and almost two-thirds maintaining AI model inventories.

S&P explicitly tied governance to credit quality, stating that weaknesses could inhibit effective scaling and lead to model inaccuracies, regulatory breaches, and costly remediation. The report noted no AI-related rating actions have occurred to date, but said variations in AI readiness, governance maturity, and data capabilities may increasingly influence competitive advantage, risk exposure, and ultimately creditworthiness. Insurers also plan to more than double the share of technology budgets allocated to AI over the next three years.

Ross Sinclair, CEO of insurtech EIP, argues the governance test plays out most concretely in claims handling. EIP, founded in the UK in 2004, built a claims rules engine in 2013 and this year layered a voice-led AI agent on top of it for information-gathering and customer interaction, while keeping payment decisions governed by insurer-configured rules rather than a probabilistic model. He wrote last December that suggesting software can make binding claims decisions without human oversight is more than optimistic. The practical takeaway for insurers evaluating AI claims tools may be that the relevant differentiator is which part of the claims process AI is allowed to influence, and how auditable that influence is.