U.S. Insurers to More Than Double AI Investment in the Next 3-5 Years: Wipro Report
EAST BRUNSWICK, N.J. & BENGALURU, India--(BUSINESS WIRE)--Wipro Limited (NYSE: WIT, BSE: 507685, NSE: WIPRO), a leading AI-powered technology services and consulting company, today announced the release of its " The AI Advantage: Building Tomorrow's Insurance Enterprise" report. The report, which includes responses from 100 business leaders from U.S. insurance companies with revenues surpassing $500 million, reveals an industry actively embracing Artificial Intelligence's (AI's) potential.
As insurance firms look to leverage AI to transform their core processes, the report shows that AI is set to become a much bigger part of Information Technology (IT) budgets, with 81 percent of firms planning to increase AI spending within the next year and most firms looking to more than double AI budgets - from 8 percent today to 20 percent - in the next 3-5 years.
Almost all (92 percent) of respondents agree that AI is essential for maintaining their competitive edge in customer experience and personalization. However, the findings point to a two-speed market, where larger firms lead AI adoption - with their robust governance frameworks and vast data resources - while many mid-sized and smaller firms face hurdles from legacy systems to limited AI expertise.
Underwriting is one of the main areas where insurers are aiming to derive value from AI. With its ability to process large volumes of structured and unstructured data, AI is increasingly helping insurers realize enhanced efficiencies and precision in underwriting. While all insurers are working to integrate AI into the underwriting process, only less than half (46 percent) say they have extensively implemented AI systems into their underwriting workflows.
Looking into the future, insurers expect AI to transform underwriting, with 68 percent indicating that it will bring enhanced risk assessment accuracy and cost savings, 65 percent saying that it will enhance compliance with regulatory requirements, and 62 percent anticipating improved customer satisfaction and retention using AI.
One of the main challenges in AI adoption is external and internal risks, according to the findings of the survey. While AI enables faster and more accurate decisions, it also introduces risks of bias and reputational damage. Alarmingly, 21 percent of insurers - 44 percent of smaller firms - still lack formal AI usage policies, leaving them exposed to compliance challenges as AI regulations evolve.
Integration is another pressing concern for AI adoption in insurance, with 71 percent of insurers citing difficulties merging AI with legacy systems. In tackling this challenge, most (65 percent) firms are adopting a phased approach to implementation to mitigate risk and ensure smoother integration.
Inter-departmental collaboration is emerging as a top priority as firms look to reap the maximum benefits from AI implementation. Forty-one percent of firms say that they are reinforcing cross-functional collaboration between AI experts and underwriters. Meanwhile, almost half (47 percent) of the respondents say they are investing in upskilling their workforce and hiring AI talent to ensure they have the right skillset for an AI-first era.
'AI adoption is no longer optional, it is essential to future success,' said Ritesh Talapatra, Vice President and Sector Head for Capital Markets and Insurance, Wipro Limited. 'As firms that drive enterprise-wide AI adoption start to reap the flywheel effects, those slower to adapt will risk being left behind. Investing in a strong data, governance and technical foundation, and aligning AI initiatives to shared business objectives will be critical to success. For firms starting on the journey, prioritizing quick wins and investing in building the foundation necessary for scale will be the key. Ultimately, the industry will need to recognize that AI is not just an innovation, it is the new foundation of success in insurance.'
Read the full report here.
About Wipro Limited
Wipro Limited (NYSE: WIT, BSE: 507685, NSE: WIPRO) is a leading AI-powered technology services and consulting company focused on building innovative solutions that address clients' most complex digital transformation needs. Leveraging our holistic portfolio of capabilities in consulting, design, engineering, and operations, we help clients realize their boldest ambitions and build future-ready, sustainable businesses. With over 230,000 employees and business partners across 65 countries, we deliver on the promise of helping our customers, colleagues, and communities thrive in an ever-changing world. For additional information, visit us at www.wipro.com.
Forward-Looking Statements
The forward-looking statements contained herein represent Wipro's beliefs regarding future events, many of which are by their nature, inherently uncertain and outside Wipro's control. Such statements include, but are not limited to, statements regarding Wipro's growth prospects, its future financial operating results, and its plans, expectations and intentions. Wipro cautions readers that the forward-looking statements contained herein are subject to risks and uncertainties that could cause actual results to differ materially from the results anticipated by such statements. Such risks and uncertainties include, but are not limited to, risks and uncertainties regarding fluctuations in our earnings, revenue and profits, our ability to generate and manage growth, complete proposed corporate actions, intense competition in IT services, our ability to maintain our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which we make strategic investments, withdrawal of fiscal governmental incentives, political instability, war, legal restrictions on raising capital or acquiring companies outside India, unauthorized use of our intellectual property and general economic conditions affecting our business and industry.
Additional risks that could affect our future operating results are more fully described in our filings with the United States Securities and Exchange Commission, including, but not limited to, Annual Reports on Form 20-F. These filings are available at www.sec.gov. We may, from time to time, make additional written and oral forward-looking statements, including statements contained in the company's filings with the Securities and Exchange Commission and our reports to shareholders. We do not undertake to update any forward-looking statement that may be made from time to time by us or on our behalf.
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