Insurance companies are increasingly linking workforce reductions to AI, even as emerging research suggests cutting jobs may do little to improve the returns generated by the technology.
Approximately 80% of organizations that have piloted or deployed autonomous business capabilities have carried out workforce reductions, according to Gartner research. However, firms generating stronger returns from autonomous technology recorded almost the same rate of job cuts as those achieving modest or negative results.
Tens of thousands of positions have been lost across insurers, brokers and health plans since the end of 2024. Several companies have explicitly identified AI or automation as a factor behind restructuring.
Acrisure announced in May 2026 that it would eliminate 2,250 jobs, representing about 11% of its global workforce. The reductions, which are expected to continue through 2027 and concentrate heavily on US operations, followed an earlier cut of 400 accounting and back-office roles in October 2025.
Peter McMurtrie, a partner in West Monroe’s insurance practice, said the changes should not be viewed simply as the replacement of workers by machines. Instead, automation is changing the knowledge and capabilities insurance companies require from their employees.
“The industry has been automating repetitive processes for more than a decade,” he said. “AI is accelerating what can be automated while improving the quality of that automation. The result is a fundamental shift in the knowledge, skills, and abilities needed for the work that remains, which increasingly centers on complex decision-making, judgment, and customer interactions.”
Operational functions involving repetitive work are likely to experience the greatest disruption. McMurtrie identified transactional claims processing, customer service and underwriting support as areas in which administrative duties can increasingly be handled by technology. “The need for experienced insurance professionals isn't going away, but the nature of their work is changing,” he said.
Gartner analyst Helen Poitevin warned that workforce reductions may free up money but do not, by themselves, produce a return from AI. The organizations improving returns were more likely to invest aggressively in employee skills, redesigned roles and operating models that allowed people to oversee and scale autonomous systems.
McMurtrie’s view is that the most effective insurers are using efficiency gains to redirect resources rather than treating workforce reductions as the end goal. “It's both,” he said. “Every insurer is under pressure to manage expenses, but the strongest companies aren't just taking costs out. They're reinvesting those savings into AI, data, digital capabilities, and modern technology. It's a self-funding approach to transformation, using efficiency gains to build the capabilities needed to remain competitive in an ever-changing market.”
However, that self-funding model depends on the projected savings actually materializing. Bain & Company’s 2026 Automation and AI Pathfinder Survey found that nearly 40% of companies measuring AI cost savings achieved reductions below 10%, despite targeting savings of between 11% and 20%. Nevertheless, 90% planned to increase their AI budgets, while 44% expected to fund generative and agentic AI investments using savings from previous automation initiatives.
The combination of job cuts and weaker-than-expected savings creates a risk that companies will remove capacity before new systems can reliably perform the work. Gartner researchers cautioned against imposing hiring freezes or headcount reductions in anticipation of AI benefits before the capabilities are operating in production.
Hiring is therefore likely to become more selective rather than stop altogether, with demand shifting toward workers capable of combining technical skills with established insurance expertise.
“We’re seeing a shift in the types of talent the industry needs,” McMurtrie said. “The industry continues to hire for AI, data, engineering, and digital roles, while investing in helping experienced insurance professionals build new skills.
“The future belongs to insurance professionals who combine deep insurance industry knowledge with technology, not one or the other.”
