How insurance can leverage AI for resilience

According to NOAA, the United States faced 27 natural disasters in 2024 alone, each causing over $1 billion in losses. From devastating floods and droughts to wildfires and severe storms, the scale of these events is growing alarmingly. Historically, according to NOAA National Centers for Environmental Information, the U.S. averaged nine billion-dollar disasters annually since tracking began in 1980. But in just the past five years, that number has skyrocketed to an average of 24 events per year – nearly triple the long-term average.  

The question insurers must ask is urgent: How do they adapt? Certainly not by doing things the way they always have. The seasons are changing, and as the industry looks to prepare for spikes in claims volume, it's a critical time for insurers to assess their technology investments and infrastructures. Is the organization AI-ready? Are the right people, processes, and systems in place to maximize the benefits of agentic AI? Is the customer at the center of it all? 

Advanced technologies, particularly agentic AI, can help steady the industry in turbulent times. As insurers grapple with not just nature's wrath but also economic challenges like inflation and tariffs, they need systems that are not just innovative but also customer-focused. 

How insurers can lead the way in AI amid rapid evolution

According to a Genpact report, "How to scale AI and build trust in insurance," only 50% of U.S. consumers currently trust their insurance company to provide accurate, tailored quotes, and 48% have struggled with the claims process. As digital innovation continues to accelerate across industries, insurance consumers also increasingly expect seamless, personalized interactions. 

AI can automate and streamline aspects of underwriting and claims processing, potentially improving the personalization of new policy quotes and enhancing the accuracy and speed of claims resolutions. For example, in P&C underwriting, AI can analyze geospatial data to assess a property's exposure to risks like flooding, wildfire, or storm damage, which allows insurers to make faster and more accurate decisions when pricing homeowners policies.

Agentic AI represents the next wave of the AI revolution, with the potential to reshape how businesses operate at every level. And the insurance industry, in its current state, is primed for transformation. The insurance industry is well-known for its data-intensive processes, extensive documentation, and a reliance on skilled human judgment for underwriting, claims management, and customer experience. Agentic AI will help transform these foundational elements by enabling smarter decision-making, automating routine tasks, and enhancing predictive analytics. With the right strategy, insurers can move beyond operational efficiency and deliver meaningful, customer-first solutions.

During times of uncertainty, such as unpredictable extreme weather events, advanced technologies that enable more precise forecasting, as well as more accurate and actionable scenario planning can make all the difference. AI agents can already streamline complex processes for insurers:

• Claims agents can triage claims in real time, flagging fraud or routing cases for fast-track processing
• Underwriting agents can evaluate submission viability, surfacing the right deals and reducing manual waste
• Customer-facing agents can personalize interactions, recommending policies and escalating when needed
  

And insurance leaders are already prioritizing these critical functions. According to the research, insurers are deploying AI most heavily in data and analytics (57%), claims (46%), and customer support (41%) – the very functions under pressure during large-scale natural disasters. Agents can be embedded across workflows. But these agents only thrive in environments built for them – platforms that are cloud-native, modular, data-rich, and extensible.

Modernize strategically, not incrementally

According to the report, many insurance companies still rely on outdated technology to run core business functions.  A large portion of IT budgets being spent just on maintaining these legacy systems, leaving little room for true innovation. Insurers should be looking to unlock that capital and invest in advanced technology now.  

Real transformation begins with the core. AI thrives on data, yet many insurers are stuck with data systems that are still fragmented, inconsistent, and often inaccessible. Without a single source of truth, they struggle to extract sustained value from their tech and data spend.

Building an AI-first platform requires reimagining of operations from the ground up.  This isn't about incremental upgrades but creating an intelligent system where autonomous agents can reason, act, and adapt in complex and dynamic environments. These AI agents aren't mere bots; they're collaborators that operate across workflows, orchestrate data, make real-time decisions, and continuously learn to drive better outcomes.

For insurers looking to use AI adoption as a catalyst for redesigning their platforms, these fundamental elements need to be in place:

1. A composable architecture with APIs, microservices, and interoperability baked in
2. A unified platform where data flows seamlessly and AI can operate across functions
3. Fusion teams that blend IT, data science, product, and compliance into agile delivery units
4. Embedded governance so that transparency and trust are built into every model
   

The era of patching legacy systems is fading. The choice isn't whether to modernize but how boldly you're willing to lead the charge.
Building for what's next

The evolution of technology and automation is creating new opportunities for businesses to take meaningful steps towards autonomous operations. But seizing this opportunity requires more than just surface-level upgrades. It demands a rearchitecting of systems, processes, and mindsets.

As extreme weather grows in frequency and customers expect more personalized, responsive service, the insurers that architect for intelligence will be the ones reaping the returns in agility, efficiency, and growth. 

By embedding AI across data, claims, customer service, and underwriting, insurers can build platforms designed for adaptability and trust. No matter what nature sends our way, the organizations investing in AI and applying it in ways that improve the customer experience will be the ones thriving for years to come.