Skip to content

78% of life insurers identified data readiness as biggest challenge in leveraging AI

78% of life insurers identified data readiness as biggest challenge in leveraging AI

A lack of data readiness is the main obstacle preventing global life insurers from realizing AI’s full potential. According to research by Equisoft, LIMRA, and Universal Conversion Technologies (UCT), 78% of life insurers identified data readiness as their biggest challenge in leveraging AI.

Australia leads in data readiness, with 38% of carriers classified as “Optimal.” In Latin America, 82% of insurers are considered “Progressive.”

However, in the US, 66% of life insurance carriers feel unprepared for AI. While organizational alignment is their strongest area, sourcing and integration remain the weakest.

Despite the challenges, AI adoption is growing. Among surveyed insurers, 87% already use AI in underwriting, operations, and new business. Most firms view themselves as “progressive” in data readiness, yet 46% admit they are not ready to implement AI effectively.

Data is foundational to everything a carrier does, now and in the future. But carriers aren’t necessarily data ready for AI because they haven’t yet considered a wholistic view of their data practices. Data quality and integrity are still work-in-progress

Mike Allee, president of UCT

“While insurers have done a good job building their data infrastructure and are making progress on aligning data strategy with business objectives, many have yet to realize AI’s vast potential because their data practices aren’t fully aligned with their AI strategy and therefore aren’t fully mature. You can’t be AI ready if you’re not also becoming data ready,” said Mike Allee.

Kartik Sakthivel, Ph.D., vice president and CIO at LIMRA and LOMA, emphasized the importance of high-quality data. “Bad data leads to bad AI. Organizations must prioritize data governance, quality, and integrity to achieve meaningful business outcomes with AI.”

U.S. individual life insurance premium is on track to reach a record $16 bn in 2024 and continue growing in the current year, as the market continues riding a bounce first seen during the COVID-19 pandemic, according to LIMRA Report.

Market conditions are very favorable for the individual life insurance market. In 2024, we expect total premium to be level with or above the record set in 2023 (up 1% to 5%).

After dropping 5% in 2022, term life sales rebounded the following years driven by digital platform expansions and competitive pricing. Premium will remain level in 2024 and grow 1% to 5% in the full year 2025, LIMRA said.

Whole life and term are often considered the core of the life insurance business. These products have represented more than 85% of the policies sold and a majority of the new premium collected each year.