A GlobalData survey found that insurers face a significant trust challenge as they expand the use of AI, particularly when the technology is involved in decisions that directly affect customers. While AI offers opportunities to improve efficiency across the insurance value chain, transparency and appropriate safeguards will be crucial to encourage customer acceptance.
GlobalData’s 2025 SME Survey found that 48.9% of respondents said nothing would improve their confidence in an insurance quote determined by an AI tool. However, 28.9% said tighter legislation regulating the use of AI in insurance would improve their confidence, while 27.7% said having the option to be referred to an insurance agent if they were unhappy with an AI-generated quote would increase their confidence. The findings demonstrate the importance of transparency, regulation, and human oversight as insurers introduce AI into customer-facing processes.
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According to the co-founder of INSTANDA, insurers should prioritize AI governance over the speed of adoption. The Financial Conduct Authority’s focus on firms demonstrating good customer outcomes means insurers must be able to explain and evidence how AI systems reach decisions, particularly in personal lines pricing. AI adoption is therefore likely to progress more quickly in lower-risk applications, while its use in decisions that directly affect customers will require greater oversight, explainability, and human involvement.
For insurers, the findings suggest that successful AI adoption will depend on more than the capabilities of the technology itself. The fact that almost half of SME respondents remain unconvinced by AI-generated quotes highlights the risk of deploying the technology without sufficient safeguards or transparency. Insurers that establish clear governance frameworks, maintain human involvement in consequential decisions, and provide customers with understandable explanations of how AI is being used will be better positioned to build trust. These measures may be particularly important for improving confidence among those respondents who are open to reassurance, allowing providers to capture the efficiency benefits of AI without undermining customer confidence or exposing themselves to increased regulatory scrutiny.
