How AI investment affects profitability and premium growth

Property and casualty insurers in North America that invest more resources in advanced analytics and artificial intelligence (AI) achieve greater profitability and premium growth, says a new survey from WTW.

Insurers using more sophisticated analytics achieved combined ratios six percentage points lower and premium growth three percentage points higher compared to slower adopters between 2022 and 2024, says the WTW 2026 P&C Insurance Advanced Analytics & AI Survey Report, released last week.

“Advanced analytics and AI are beginning to yield significant payoffs, as lead carriers report measurable returns on investment,” says Laura Doddington, head of personal and commercial lines for North America with WTW’s Insurance Consulting and Technology business, in a press release. “With insurers planning to ramp up investment across personal and commercial lines, advanced analytics is shifting rapidly from competitive advantage to essential requirement to maintain market viability and drive sustainable growth.”

Almost all insurers that took part in the WTW survey now use underwriting and pricing analytics. Close to 80% of 59 insurers polled in Canada and the U.S. rely on advanced rating and pricing models, with an additional 11% planning to implement them soon. This makes predictive rating models essentially universal from 2026, WTW reports.

From a Canadian P&C brokerage perspective, brokers have also found actions or investment in AI or machine learning tools such as ChatGPT beneficial over the past two years. Thirty-five percent of brokers in Canadian Underwriter’s 2026 National Broker Survey rank AI investments or actions as ‘highly beneficial’ or 4/5 on a scale of 1 (not beneficial at all) to 5 (highly beneficial). That’s up from 24% in CU’s 2025 broker survey and 17% in 2024.

Diverging perspectives

There is a discrepancy, however, in AI investment ambitions between carriers and brokerages. In WTW’s survey, more than half of respondents report already using things like large language models and generative AI. Another 29% plan to adopt these technologies within the next two years. While only 16% of polled insurers currently use AI to augment human underwriting, this figure is set to rise sharply, with 60% of insurers planning to prioritize this between now and 2028.

“If survey respondents follow through with their intended AI and machine learning initiatives, adoption in underwriting, claims and customer service is set to increase two or even threefold by 2028,” WTW says in the release.

But when asked how much money Canadian P&C brokerages have invested to implement AI platforms or initiatives, 75% of respondents in CU’s 2026 National Broker Survey said, “we have not invested in AI.” Twenty-two percent said up to $5 million, while only 3% said between $6 million to $10 million.

WTW’s survey found insurers’ claims functions have been slower to adopt, but more carriers are signalling aggressive plans to expand their use of advanced analytics. Although one-third or fewer carriers currently use claims advanced analytics for fraud detection (33%) and severity assessment (29%), these figures are expected to reach 65%-70% within the next two years. An additional 36% plan to introduce straight-through processing in claims workflow automation, a significant increase from the current 14%.

“The ability to harness advanced analytics and AI will increasingly define market relevance, operational efficiency, and strategic agility…,” Doddington says.

Jason Contant

Jason has been an award-winning journalist with Canadian Underwriter for more than a decade, including the past three years as associate editor and, before that, as digital editor for seven years.