Shadow AI is on the rise among insurance employees, a study warns, with 90% of respondents reporting they use AI tools not formally introduced by their employer.
More than 90% of insurers in the UK and US are using artificial intelligence to support data ingestion, according to new research from insurtech provider hyperexponential (hx).
However, many firms still lack clear strategies needed to maximise AI’s potential, the insurtech warned.
The study, based on a survey of 350 underwriting, actuarial and IT professionals in the specialty and commercial insurance markets, found data ingestion to be the most advanced AI application across both regions, with 95% of UK insurers and 89% of US insurers now using the technology in this way.
However, the research highlights significant challenges in leadership and governance, particularly in the UK. Forty-one per cent of respondents said their organisation has no designated AI lead, creating fragmented approaches and making it harder to deliver consistent strategies across teams and regions.
AI governance remains underdeveloped in many firms. Fewer than one in five UK respondents said their validation and governance practices are “highly developed and widely communicated”, compared to 45% in the US.
In the US, the study identified a sharp rise in the use of “shadow AI”, with over 90% of respondents reporting they use AI tools not formally introduced by their employer. While this reflects enthusiasm for AI-driven solutions, it also points to a disconnect between employee-led innovation and formal governance structures.
Amrit Santhirasenan, chief executive of hyperexponential, said: “It’s encouraging to see insurers embedding AI into their operations, especially around data ingestion, which is a vital step towards truly intelligent automation. However, implementation without thoughtful, proportional oversight creates risk. Without a clear strategy that links experimentation with long-term goals, organisations could end up repeating work or missing out on the full benefits of AI.
“The message is clear - AI is not just a technological opportunity and challenge. It’s a leadership, governance, and cultural challenge, and the insurers who succeed will be those who treat it as a company-wide objective, not just a department-led experiment.”
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