S&P Global Ratings says “robust governance” and other risk control measures are vital as insurers expand use of artificial intelligence to drive business performance. 

Findings from the credit assessment agency’s survey of 121 general, life and health insurance entities suggest the industry will significantly increase AI-related expenditure over the next three years. 

About 83% of the survey respondents, including 14 in the Asia-Pacific region, say they are in the early or intermediate stages of their AI journey; they are using the technology to automate internal workflows; 50% are using AI for customer solutions; and 39% are deploying it for risk management purposes. 

“We expect AI’s benefits and risks to be increasingly relevant credit considerations across the insurance sector,” S&P said.

“Insurers that implement AI with robust governance, disciplined execution, and effective risk controls will be better positioned to enhance operational efficiency, strengthen customer engagement, and generate tangible benefits to their long-term profitability.” 

S&P warns the benefits of AI adoption for insurers are not guaranteed. 

“As AI adoption becomes more widespread, we believe the differentiating factor will increasingly be insurers’ ability to scale AI effectively while maintaining robust governance and risk controls,” the credit rating agency said. 

“Consequently, variations in AI readiness, governance maturity, and data capabilities may increasingly influence competitive advantage, risk exposure, and ultimately creditworthiness. 

“We expect AI’s benefits and risks to be increasingly relevant credit considerations across the insurance sector.”