Insurtech has grown beyond buying a policy online. It now spans how insurers design products, assess risk, set prices, handle claims, serve policyholders and try to prevent losses. Digital tools can make insurance more convenient and efficient, but the same systems raise questions about privacy, fairness, cybersecurity and human oversight.
What insurtech means
Insurtech is the use of technology and data to change insurance products and the work around them. The National Association of Insurance Commissioners (NAIC) describes technologies such as big data, connected devices, mobile tools, artificial intelligence (AI) and automation as ways to make insurance easier or more personalized for consumers and to streamline insurers’ practices. The changes can touch product design, risk assessment, sales, customer interactions and claims. NAIC: Insurtech
It is not just a label for startups or online-only insurers. Established carriers, technology providers and newer companies all participate; some insurtechs collaborate with incumbent insurers, while others operate standalone offerings. The term covers a range of technologies and business arrangements, not a single insurance product or level of automation.
Where technology is changing the insurance lifecycle
Buying policies and managing accounts
Websites and mobile applications can let customers compare or purchase coverage, manage policy details, submit documents and check a claim’s status. Chatbots may answer routine questions about billing, policies or claims. These tools can reduce friction, but convenience alone does not establish that a policy is suitable or that a decision made through a digital channel is easy to challenge.
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Underwriting and pricing
Data analysis and AI can help insurers assess risk and inform pricing. In auto insurance, telematics can support usage-based offerings that relate premiums to driving behavior. The details vary: the example does not mean every insurer uses telematics, that every scoring method is fair or transparent, or that a customer can always see how particular data affected a decision. The NAIC notes that AI-supported decisions can raise bias and transparency concerns. NAIC: Artificial Intelligence
Claims and back-office work
Insurers can use automation and AI to assist with document processing, claims management, fraud detection and software development. EIOPA’s March 2026 account describes many generative AI (GenAI) applications as concentrated in back-office work; it also characterizes adoption as cautious and commonly subject to human review. Assistance with a task is not the same as handing a consequential claim decision entirely to a system. EIOPA: Insurance, innovation and investment
Preventing losses
Connected devices can help identify hazards: a smart-home sensor might detect a water leak or smoke, for example. Wearables may support some wellness-linked health or life insurance offerings. These are possible applications, not evidence that every policyholder needs to buy a device or that monitoring automatically prevents a loss.
What adoption and investment figures show—and what they do not
Two different kinds of evidence indicate momentum, but they measure different things. Gallagher Re reports investment in InsurTech companies; EIOPA reports insurers’ use and plans for one category of AI in a defined region. Neither figure is a global measure of customer adoption or proof that technology has improved insurance outcomes.
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| Measure | Reported figure | What it represents |
|---|---|---|
| Global InsurTech venture funding, 2025 | USD 5.08 billion, up 19.5% from USD 4.25 billion in 2024 | Funding reported by Gallagher Re; it is not total insurance technology spending or insurance premiums. |
| AI-centered share of InsurTech funding, Q4 2025 | 77.9% | The portion of InsurTech funding in that quarter going to AI-centered companies, according to Gallagher Re. It is not the share of insurers using AI. |
| GenAI use among insurers surveyed in 2025 | 65% already using it; another 23% planned to use it | EIOPA’s survey of 347 insurers in 25 European Economic Area countries. Planned use is not current use, and many applications remained at proof-of-concept stage. |
Sources: Gallagher Re, Global InsurTech Report for Q4 2025; EIOPA, Scaling AI in finance.
Potential benefits come with trade-offs
Technology can improve convenience, speed routine service, support more tailored pricing and help identify risks before they become costly claims. Whether a particular customer receives those benefits depends on the product, implementation and decision involved; the available figures do not establish a sector-wide improvement in claim speed, cost or customer satisfaction.
Data-driven insurance also creates risks that deserve attention alongside the possible gains:
- Privacy and data use: Connected devices and analytics can involve sensitive personal information. Customers may not have a clear view of what is collected, how it is used or how long it is retained.
- Bias and explainability: AI-supported underwriting, pricing or claims decisions may produce unfair outcomes or be difficult to understand. A model’s output still needs appropriate governance and review.
- Cybersecurity and resilience: More digital systems and data create exposure to cyber incidents and service interruptions. The International Association of Insurance Supervisors (IAIS) identified AI’s impact on insurers’ cyber resilience as a 2026 supervisory focus. Its broader 2026 market report also discusses economic and geopolitical pressures on insurers; those wider pressures are not all caused by insurtech. IAIS: 2026 mid-year market report
- Dependence on outside providers: Insurers may rely on external models, cloud services or other technology vendors. EIOPA highlights the need for governance, oversight, fallback capacity and provider diversity so that a disruption or concentration of services does not leave an insurer without workable alternatives.
How regulators are responding
Rules differ by jurisdiction; the US and EU approaches should not be treated as one global standard.
United States
The NAIC says its Model Bulletin on the Use of Artificial Intelligence by Insurance Companies was adopted in December 2023. It sets expectations for AI governance and reminds insurers that AI-supported decisions must comply with applicable insurance laws and regulations. As of March 2026, the NAIC said 12 states were piloting its AI Systems Evaluation Tool, with adoption anticipated at the Fall 2026 National Meeting. That was an anticipated timetable, not confirmation that adoption later occurred. NAIC: Artificial Intelligence
European Union
EIOPA points to existing frameworks that include Solvency II, the Insurance Distribution Directive, the Digital Operational Resilience Act (DORA) and the AI Act. Its 2026 publications emphasize proportional, risk-based implementation, explainability, monitoring outcomes, human oversight and attention to operational and concentration risks. Which obligations apply depends on the relevant framework and circumstances. EIOPA: Scaling AI in finance
What to look for as a policyholder
You do not need to evaluate an insurer’s technology stack to make a sound coverage decision. When a digital tool, data-driven price or automated service affects you, focus on the practical questions:
- What data does the insurer collect, and how does it affect the service, price or decision?
- Can you review or correct relevant information, and ask for an explanation if a decision affects your coverage or claim?
- Is a person available to help when the automated process does not resolve your issue?
- For a connected-device or usage-based offer, what monitoring is involved, and what happens if the device or service fails?
These questions distinguish a genuinely useful feature from technology that simply adds data collection or complexity. EIOPA Chairperson Petra Hielkema put the broader challenge this way at a Vienna conference on April 15, 2026: “The real issue is how we can ensure that innovation unfolds in a manner that is responsible, resilient, and truly beneficial to people.” EIOPA: Hielkema’s April 15, 2026 speech
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