Artificial intelligence (AI) is increasingly shaping insurance interactions in the US, from virtual assistants to automated claim updates and customer service chatbots. 

While insurers see potential to improve efficiency, reduce costs and enhance service, policyholders remain cautious about how AI is applied and who ultimately benefits. 

J.D. Power data shows that consumers are most comfortable with AI handling routine insurance tasks. Sending automated claim status updates (24%), managing billing (23%), and answering basic service questions (21%) are widely accepted applications. These tasks provide tangible convenience for policyholders while allowing insurers to streamline operations and allocate human resources to more complex cases.

Skepticism in claims and policy pricing

More critical insurance functions reveal a trust gap. Nearly half of respondents (47%) are somewhat or very uncomfortable with AI processing claims, signaling a preference for human oversight in decisions with financial or coverage implications.

When it comes to pricing policies, one-third of customers believe AI use should be limited until ethical standards and bias safeguards are established, while 30% support partial AI use with strict oversight. Only 15% of consumers favor fully automated policy pricing. This highlights that underwriting, claims adjudication, and risk assessment remain areas where human judgment is highly valued.

For insurance companies, these attitudes underline the importance of transparency and communication. AI can offer speed, consistency, and operational efficiency, but consumers expect fairness, accountability, and ethical safeguards. Insurers that clearly demonstrate the benefits of AI - such as faster claims resolution, reduced errors, and personalized service - are more likely to gain customer trust and adoption.

Strategic opportunity in AI integration

Balancing AI-driven efficiency with strong oversight provides a competitive advantage. Insurers can leverage technology to enhance the customer experience while maintaining confidence in critical processes like claims management and policy underwriting.

Companies that provide clear explanations of AI’s role, alongside human oversight, are best positioned to integrate advanced technologies without eroding trust.

As AI adoption continues to grow in the insurance sector, the companies that succeed will be those that align innovation with customer priorities, ensuring that technology serves policyholders as well as operational objectives.