As labor shortages and skills gaps intensify across industries, businesses are increasingly turning to artificial intelligence not just to boost productivity, but to fill critical workforce gaps. What began as a tool for efficiency is quickly becoming a structural solution to hiring constraints, and insurance specialists warn that this shift is already reshaping workplace risk in ways that could significantly alter the future of workers’ compensation.
As of early 2026, roughly half of US employees now use AI in some capacity at work, with 28% using it at least weekly and 13% using it daily, according to Gallup research. Among US firms deploying AI, 38% report increasing headcount compared to 23% reducing it.
In sectors such as manufacturing, logistics, and construction, automation and AI-enabled systems are stepping in to handle repetitive, physically demanding, or high-risk tasks. In office environments, generative AI tools are augmenting administrative, customer service, and analytical functions, reducing reliance on scarce talent and allowing existing employees to focus on higher-value work.
At the same time, so-called “physical AI”, including autonomous systems, robotics, and smart machinery, is performing a growing share of tasks. This evolution is shifting workplace exposure away from traditional human-driven incidents toward risks tied to system failures, software errors, and machine downtime.
Yet the picture is not purely negative. AI-powered systems can also reduce accidents. Computer vision tools and predictive analytics are already being deployed to identify hazards before incidents occur, enabling earlier intervention and improving overall workplace safety.
According to Chris Raimondo, insurance consulting leader for the Americas at EY, insurers are beginning to adjust to this evolving risk landscape. “Underwriting is increasingly tied to software, sensors, and real-time data,” he said, pointing to early examples such as usage-based insurance products that adjust pricing depending on whether a vehicle is operated manually or in autonomous mode. “In a more automated or hybrid workforce, workers’ compensation products may start to resemble broader commercial package policies.”
As AI adoption grows, risks such as system failure, cyber vulnerabilities, and business interruption are expected to become more prominent, while traditional injury claims may decline or change in nature. Liability attribution is also becoming more complex, often involving multiple parties, said Raimondo.
To address this, insurers may need to segment risks into distinct pools, i.e. from human-operated environments to hybrid workplaces and fully autonomous systems; each requires tailored coverage models and underwriting approaches.
Claims processes are also poised for significant transformation. Rather than relying primarily on eyewitness accounts and physical evidence, insurers will increasingly depend on digital records to determine causation and liability.
“The entire industry is oriented towards investigating and adjudicating claims in a very specific way today,” Raimondo said. “In the future, it’s going to have a lot more to do with sensor logs, data from manufacturers, and evaluating software fault. The whole claims process will change dramatically.”
This shift could make claims both more precise and more complex. While richer data may improve accuracy, it also introduces new challenges around data access and standardization, particularly when multiple stakeholders control different parts of the system.
With nearly 40% of job skills expected to change by 2030, AI integration is set to accelerate across nearly every industry. For the workers’ compensation market, this creates a dual challenge: managing evolving risks within existing portfolios while developing new products to address emerging exposures tied to AI-driven operations.
“The focus is on creating protection that supports growth,” Raimondo said. “As adoption increases, insurers need to rethink not just products, but the entire value chain.”
