Insurance agents are embracing artificial intelligence at a pace that vastly outstrips the governance frameworks their employers are building to manage it, creating a regulatory and compliance risk that threatens the industry’s ability to deploy AI responsibly. According to ReSource Pro research released in May 2026, 98% of insurance agencies are planning AI investments this year, yet only 13% have a formal AI use policy in place, according to the Big “I” Agents Council for Technology.
The adoption surge is dramatic and accelerating. Perspective AI found that 64% of US insurance agencies now use AI in at least one workflow as of May 2026, up from 38% in 2024. Two-thirds of independent agents told the Big “I” they plan to increase their AI use in the next 12 months. Agencies cite operational efficiency (60%) and staff productivity (52%) as their primary drivers.
But the governance gap is equally stark. According to the Big “I” report from February 2026, 55% of agencies do not have a written AI use policy at all, and another 23% are still developing one. Data privacy and compliance risks top the list of concerns (24%), followed by inaccurate outputs (22%). This mismatch between rapid deployment and documented controls is not a minor administrative lag—it’s a structural vulnerability that regulators are beginning to scrutinize.
Spike Lipkin, chief AI officer at Willis, warned in the firm’s May 2026 Risk and Resilience report that “AI is already reshaping the risk landscape in real time, but many organizations are moving forward without fully understanding the systems they rely on.” The Willis analysis found AI already embedded across underwriting, claims and cyber defense, yet the market remains divided on how to manage the liability exposure. One in five insurance professionals surveyed by Gallagher reported their insureds had already experienced losses linked to AI risk, even as most policy wordings were never designed with AI in mind.
The regulatory environment is moving faster than governance infrastructure can adapt. According to Trustible, a governance compliance firm, the insurance AI regulatory landscape is moving faster than manual governance programs can keep pace. The NAIC Model Bulletin on AI has been adopted by 24 states and requires carriers to maintain governance frameworks, test for unfair discrimination, and document human oversight of AI decisions. Colorado’s AI Insurance Regulation requires formal testing for bias, and Colorado SB 205 imposes impact assessments for high-risk AI decisions affecting consumers. When an insurance regulator examines a carrier during a market conduct exam, they expect documented evidence of AI governance, audit trails, and risk assessments. A governance program assembled in the weeks before an examination is not the same as one maintained continuously, and examiners can tell the difference.
The agencies seeing the greatest success with AI are not replacing human agents but using the technology to handle repetitive work and free staff for relationship-driven tasks. ReSource Pro research shows that hybrid operating models combining AI-driven automation with human expertise are emerging as the preferred strategy. AI can assist with data entry, policy summarization, customer service routing, and claims workflow automation, while agents focus on advisory services, relationship management, and strategic client conversations. Yet this balance requires clear governance—policies that define which decisions AI can make autonomously and which require human review. Without documented frameworks, agencies risk both regulatory exposure and customer trust violations.
The insurance industry faces a choice between building governance infrastructure proactively or assembling it retroactively during regulatory examinations. Carriers that move fastest to establish AI governance programs will absorb new regulatory requirements as they emerge, rather than treating each one as a separate compliance project. Those that do not risk coverage denials at renewal, enforcement action, and the forced unwinding of AI-driven processes that should have been governed from the start.
Sources
- ReSource Pro — 98% of insurance agencies planning AI investments in 2026; hybrid AI and human operating models.
- Perspective AI — 64% of US insurance agencies using AI in at least one workflow in 2026, up from 38% in 2024.
- Big “I” Agents Council for Technology (ACT) — Two-thirds of independent agents plan to increase AI use; 55% lack written AI policy; 13% have formal policy; 24% cite data privacy/compliance concerns.
- Willis — AI embedded across underwriting, claims, and cyber defense; governance frameworks not keeping pace; one in five insureds experienced AI-related losses.
- Trustible — Insurance AI regulatory environment moving faster than manual governance programs; NAIC Model Bulletin adopted by 24 states; Colorado AI Insurance Regulation and SB 205 requirements.
- Insurance Thought Leadership — 90% of insurance professionals expect AI to manage end-to-end claims within 24 months; 87% concerned about bias; 99% believe human oversight necessary.
