Role of AI-First Players in InsurTech

I’ve seen many insurers experimenting with AI - but only a few are realizing transformational value. In our latest report, which I had the pleasure of co-authoring, we examine what truly separates AI leaders from the rest. The results were striking: 📈 Over the past five years, insurers leading in AI achieved 6.1x the total shareholder returns of AI laggards. This is more than a technology advantage, it’s a strategic imperative. So, what sets the AI leaders apart? ✅ They take an enterprise-wide approach to AI—not isolated pilots. ✅ They rewire their core processes: underwriting, claims, distribution, and customer service. ✅ They build a modern capabilities stack—scalable infrastructure, high-quality data, and reusable components. ✅ They invest just as much in change management and workforce enablement as they do in technology. ✅ They view gen AI and agentic AI not just as tools, but as differentiators capable of reasoning, empathy, and creativity. AI is becoming the defining force of competitive advantage in insurance, and the gap between leaders and laggards is widening fast. 📘 Explore our perspective here: https://lnkd.in/ekaV_Jyy #Insurance #AILeadership #GenAI #DigitalTransformation #FutureOfInsurance #AgenticAI #InsureTech #McKinseyInsight #FinancialServices

We’re seeing it up close: the back office of insurance is being rebuilt by software, not people. Last week, I wrote about what happens when professional services clients stop paying for inefficiency. This is the next chapter, with a closer look at the insurance sector. We’ve looked at nearly a dozen AI startups automating the work that BPOs have handled for years. The picture isn’t simple, but the direction is clear. A quiet shift is underway in insurance distribution. Not at the front end, but in the workflows: quoting, policy checks, certs, submissions, and proposals. For two decades, BPOs like Patra, ResourcePro, and Xceedance scaled by taking that work offshore. They built strong businesses on process depth, labor efficiency, and repeatability. Now AI-native startups are targeting the same functions. They are automating quote comparison, policy checks, and proposal development. This isn’t cheaper labor. It’s no labor. At first glance, it looks like disruption. But the dynamic is more complicated. Three forces are now colliding, with everyone fighting for their scrap of margin: – Brokers looking to scale – BPOs trying to stay relevant – AI vendors aiming to replace manual processes with software No one moves in isolation. Each shift affects the others. Everyone is trying to avoid being commoditized. Brokers are experimenting. BPOs are adjusting. AI companies are moving quickly and aiming high. From where I sit, as a venture investor focused on this space, the pattern is clear: as the cost of operations drops, so does the barrier to entry. What becomes more valuable is not process. It is proximity to the insured. The question isn’t who owns the workflow. It is who owns the customer relationship — the trust, the interface, and the ability to guide decisions. That is where power accumulates. And that is where the next winners will emerge.

The industry with 6x the TSR vs. the average 2–3× is… insurance. Insurers that lead with AI aren’t just keeping pace, they’re creating 6× the shareholder returns of laggards. The reason? Making bold choices about where to build, buy, or partner ... and rewiring the business, not just dabbling in pilots. Often cast as risk-averse, insurance shows the opposite here: when insurers center strategy with AI, the rewards are exponential. Leaders have created six times the shareholder returns of laggards over the past five years. My colleague Tanguy Catlin has spent years guiding insurance and financial-services clients through transformation. He and our insurance colleagues highlight that, to win, insurers can double down on four of the six rewired components: (1) Business-led roadmap: tie AI directly to value creation, not tech curiosity. (2) Operating model at scale: embed AI into how the business runs, not just in pilots. (3) Flexible AI stack: technology designed for speed, modularity, and distributed innovation. (4) Adoption & change management: because even the best AI fails without human adoption. Here’s what outcomes look like for insurers who get serious: domain-level transformation has already yielded a 10-20% lift in new agent success and sales conversion, 10-15% growth in premiums, 20-40% lower cost to onboard customers, and 3-5% improvement in claims accuracy. These aren’t incremental tweaks, they move core levers that impact the top and bottom line. Full article linked below and authored by Nick Milinkovich, Sid Kamath, Tanguy Catlin, and Violet Chung, with Pranav Jain and Ramzi Elias. https://lnkd.in/df2GXpuq

We're starting to see real dollar impact from AI in brokerage operations. And I'm not talking about hypothetical ROI calculations. After launching our AI suite, our early adopters are reporting numbers that even surprised us. One broker just showed me their Q3 results — they're operating like they added 3 full-time employees without hiring anyone. The breakthrough is happening in policy checking: • Lead times down from 4 days to 5 minutes • Cost per check reduced by 30% • Accuracy improvements catching issues they used to miss One mid-market broker saved $42K last quarter. Just on policy checking efficiency. But here's what actually matters: This is just the beginning. We're not even talking about the compound effects yet. When your team stops drowning in manual checks, they start finding coverage gaps. When they find coverage gaps, they win more business. When they win more business, the whole operation scales. The early results tell us something important: Brokers who move first on AI aren't getting incremental improvements. They're getting structural advantages. While competitors are still outsourcing to BPOs and dealing with 5% error rates, these brokers are building a different kind of operation entirely. Your move. #Insurance #Insurtech #PowerbrokerAI #BrokerLife #PolicyChecking #AIinInsurance

Over the past few years I’ve had the privilege of building AI systems in two highly regulated industries: first in fintech, where I initiated Marqeta’s Docs AI, and now in insurance, where I lead Commercial Insurance and AI Technology at GEICO. Those experiences have shaped how I think about AI’s role in real businesses. Cost savings is one valid lens for AI, but it’s not the full story. The more important shift is how AI can capture and scale human expertise, preserving institutional knowledge and accelerating judgment across underwriting, compliance, claims, and service. In my recent article I wrote about this transition from AI agents to AI assistants and why assistants matter more than the hype suggests: https://lnkd.in/gGY8BqTV It follows my earlier piece: Break Down Silos with AI Agents: Connect Disparate Workflows Without Extra Spend  https://lnkd.in/gTzp_inY Together they trace a journey from breaking silos to building cognitive scale. Curious to hear how others are using AI assistants, not just AI agents, to scale knowledge inside their organizations.

This Summer was big for Insurtech across American and the momentum is shifting towards strong fundamentals 🚀 💼 Ethos Technologies filed for IPO (LIFE) after posting 55% YoY revenue growth and solid profitability, proving digital life insurance can scale. 🏠 Slide is targeting a $2B+ valuation through its IPO, with underwriting profits up nearly 70% YoY, showing that even in challenging P&C markets, disciplined tech-driven models win. 🤖 AI is leading funding trends: Insurtechs raised $1.3B in Q1 2025, with over 60% flowing into AI-first underwriting, claims, and risk analytics solutions. 🌪️ Emerging players like Sola (parametric climate insurance), ZestyAI (property risk data), and Upstage (LLM-powered document intelligence) show where innovation is heading to like smarter risk, faster operations, and embedded intelligence. Investors are rewarding and pumping money in to platforms that blend innovation with solid underwriting and operational discipline. #Insurtech #InsuranceInnovation #AI #Underwriting #propertyandcasualty #Startups #Funding #Insurance #oliverjames