A new Oxbow Partners report has suggested that CEOs in the commercial and specialty re/insurance sector must move beyond experimentation and develop the operating models, governance structures and decision-making capabilities needed to turn AI investment into a competitive advantage.
Oxbow Partners’ new CEO Agenda report, authored by Partner Chris Sandilands and Senior Manager Oliver Watts, with contributions from Miqdaad Versi, Greg Brown, Manmeet Singh Bawa and Anthony Stevens, argues that AI will “only create lasting advantage” in commercial and specialty re/insurance when it enables leadership teams to make better judgments in complex, high-value markets.
According to the report, insurers are investing significantly in AI, but many have yet to determine how it can deliver a “durable competitive advantage” beyond efficiency improvements, pilot programmes or isolated use cases.
Oxbow Partners said AI has represented a step-change in capability since 2023. Unlike previous transformation efforts, which focused on standardising high-volume processes through automation and outsourcing, AI reportedly reduces the need for standardisation and scale as prerequisites for delivering value.
With the right information infrastructure in place, Oxbow explained that AI can democratise access to information and decision-making, allowing more employees to make better-informed decisions autonomously.
The report also stated that AI’s competitive advantage will come from enhancing judgment across complex risks and portfolios, rather than simply automating tasks.
The firm added that CEOs should look beyond productivity improvements and assess how AI can reshape their organisations, while ensuring they have the operating models, governance frameworks and data foundations required to scale AI responsibly.
As per the report, companies that achieve the greatest advantage will be those that embed AI into strategic and underwriting decision-making, rather than simply running the most pilot projects.
“AI is not InsurTech 2.0. It is strategic, and not tactical; core, not ancillary. AI is going to change every industry and insurance is no exception,” Oxbow Partners noted.
However, despite AI’s potential to be transformational for the industry, the firm warned that it is not a silver bullet or a strategy.
“Applied thoughtfully, it creates value; applied poorly, it creates cost. We remind CEOs that, no matter what investors say, Al is a tool and not a religion,” Oxbow Partners concluded.
