Property and casualty insurance companies are increasing AI spending, but that doesn't equate to AI integration — only 23% of insurers report
The 2026 State of P&C Insurance Technology report from
Insurance companies with fully integrated AI are 3.6 times more likely to report real-time portfolio control, which means teams can see and act on portfolio performance as it happens. Thirty-one percent of insurers report that it takes weeks or longer to detect and respond to changes in portfolio performance.
"The data we've surfaced is pretty surprising and might get uncomfortable for leadership: There's a huge disconnect between strategy and execution. Ninety-three percent of our surveyed leaders believe there's alignment on strategy and guidelines across teams, but their underwriters are living a completely different reality," said Will Ross, CEO and co-founder at Federato. "That's what happens when AI sits alongside the workflow instead of inside it. The insurers [that] are getting real results from AI are using it to change how decisions get made, not a marginal improvement on the same process."
Employees at the largest insurers reported the highest amount of time spent fixing errors, re-entering data and searching across systems.
Ten percent of the respondents said the company they work for is in the early stages of AI adoption, while 47% said there is broad integration. Eighty-nine percent of employees also report, at least occasionally, using unsanctioned AI tools outside their company's approved systems.
