AI trust insurers must establish remains a central challenge for the insurance sector, according to a new report published by IDC and commissioned by SAS on March 9, 2026. The report, titled “The Data and AI Impact Report: The Trust Imperative,” finds that insurers lag behind other industries in data infrastructure maturity despite showing relative strength in delivering trustworthy artificial intelligence.
The study analyzed four industries: insurance, government, life sciences, and banking. Insurance ranked last in both AI and data infrastructure maturity. Only 7% of insurers describe themselves as “transformative,” the lowest share across all sectors analyzed.
AI Trust Insurers Are Struggling to Establish
Trust gaps represent a significant barrier to progress. Only 9% of insurers combine a high level of trust in AI technology with strong trustworthy AI capabilities. Moreover, over 40% fall into one of two problematic categories: underutilization, defined as low trust in reliable systems, or overreliance, defined as high trust in unproven systems.
Kathy Lange, Research Director of the AI and Automation Practice at IDC, said the findings place insurance in a nuanced position. “Our research shows the insurance industry in line with other sectors — if not slightly ahead of them — in terms of delivering trustworthy AI,” Lange said. “However, when it comes to the level of maturity of AI and data infrastructures, insurers lag behind.”
Governance and Data Gaps Slow Adoption
The report identifies several structural weaknesses slowing AI adoption across the insurance sector. Over half of insurance respondents — 51% — said their organizations lacked effective data governance. The same percentage reported that their data foundations were neither centralized nor optimized. In addition, 44% identified a shortage of specialized AI talent as a key obstacle.
Furthermore, 14% of insurers still operate with siloed data infrastructure, which the report links directly to slower innovation and limited enterprise-wide AI adoption. These structural gaps compound the challenge of scaling AI responsibly.
Conservative Investment Signals Cautious Outlook
Investment patterns reflect the sector’s measured approach. Approximately 8% of insurers expect to increase their AI spending by at least 20% in the next year. Nearly 60% anticipate an increase of between 4% and 20%. However, about one-third expect an increase of 3% or less, or an outright decrease in investment.
Franklin Manchester, Global Insurance Strategic Advisor at SAS, said the sector must move beyond viewing AI as a shortcut. “AI is an imperative for businesses, but it’s not a magic pill,” Manchester said. “For AI to generate value throughout the enterprise, it needs to be supported by talented people and fueled with robust, connected data.”
Growth, Not Cost-Cutting, Drives Highest AI Returns
The report challenges a common assumption about AI’s primary value. Cost-reduction measures produce the lowest return of any AI use case studied. Consequently, the report points to customer experience improvement, market share expansion, and resilience strengthening as the areas offering the greatest opportunity.
Manchester said competitive insurers will prioritize growth-oriented applications. “Making processes more efficient is still important,” Manchester said. “But the most competitive insurers will focus on using AI for innovation to drive premium growth through outstanding customer experiences.”
Future Outlook for Insurance AI Maturity
As the insurance sector moves toward greater AI maturity, the report suggests that governance frameworks and data infrastructure investment will determine which organizations gain a competitive advantage. Insurers that integrate AI into existing operations while establishing responsible governance structures are positioned to lead on growth and customer value creation.
“The insurers who can infuse AI into their existing operations — and who establish the governance necessary to deliver safe and responsible AI at scale — will have a competitive advantage for growth, innovation and creating value for their customers.”
Franklin Manchester, Global Insurance Strategic Advisor, SAS