Where is AI’s ROI for Insurers?

A clear shift emerged in how the insurance industry is thinking about AI at a recent Innovators Network session. It was hosted by COVER Publications, in partnership with Microsoft and Sapiens.

This was not another buzzword-y conversation about AI tools, pilots, or isolated innovation projects. It was a deliberate reframing from technology adoption in insurance, to AI’s quantitative business impact for insurers.

In a room filled with executives, technologists, and strategic thinkers, the discussion moved beyond hype to something far more consequential: how AI is reshaping value, decision-making, distribution, and ultimately, the structure of the industry itself.

From Tech to the Business of Insurance

Tony Van Niekerk, managing director at COVER, opened his session by emphasising the need to move beyond technology as a standalone topic. There is still a tendency to think in terms of systems, platforms, and innovation, but leaders operate through a business lens framed by risk, capital, and calculated decision-making.

Insurance has traditionally evolved cautiously, shaped by actuarial discipline and regulatory oversight. But technology has quickly become embedded in every aspect of operations and AI offers a revolution, the biggest risk is remaining static.

We are far past the point of considering whether AI will impact the industry. The questions are how deeply? How quickly? And who will capture the value?

AI is Mandatory – Value is Not Guaranteed

Dr. Imtiaz Abdul Kader, COO for Absa Life, opened the external speaker sessions with a strong point of view: AI adoption is no longer a strategic choice, it is a requirement for relevance.

He noted that the real challenge is not access to AI, but understanding how to unlock its value. Too often, organisations equate activity with progress. Running isolated pilot projects, experimenting with generative tools, or deploying scattered copilots creates a transformation illusion. Without a clear connection to business outcomes, these efforts rarely translate into measurable impact.

The opportunity lies in moving towards what Dr. Imtiaz described as integrated intelligence – the ability to combine data, systems, and decision-making into a cohesive capability that delivers real business value.

AI is only as effective as the environment in which it operates, the data it draws from, the problems it is applied to, and the strategic intent behind it. Organisations must move from viewing AI as a tool, to recognising it as a foundational capability that shapes how the business operates and the value that is derived.

From Experimentation to Execution

After Dr. Imtiaz framed the opportunity, Graham Gordon, Product & Strategy Director at Sapiens, drilled down further. His focus was simple: where is the return on AI investment?

There is no shortage of experimentation across the industry. But when executives ask what impact AI is having on profitability, growth, or efficiency, the answers are often unclear. This highlights a growing disconnect between ambition and execution.

Graham challenged the assumption that AI initiatives automatically create value. He emphasised the need for alignment between strategy, data, and implementation. Without this, organisations risk investing heavily in technology, without seeing meaningful returns.

Graham also outlined the scale of the opportunity. AI has the potential to transform the entire insurance value chain, from underwriting and claims, to fraud detection and customer engagement. More importantly, it enables a shift from reactive to proactive models, where insurers move beyond paying claims, to preventing losses.

Achieving this state requires more than technology. It demands organisational readiness, strong data foundations, and a willingness to rethink existing operating models. AI will not deliver value by default. It must be engineered into the business.

Humans Augmentation, Not Replacement

Rupert Nicolay, Director, Industry Advisor, Worldwide Financial Services at Microsoft, brought the conversation closer to the frontline of the industry – distribution.

In South Africa – where brokers, advisors, and call centres remain central to customer engagement – the question is not whether AI will replace people, but how it will enhance them.

Rupert’s answer was clear: the future is human plus machine. AI is already beginning to reduce friction in everyday workflows, from onboarding and training, to knowledge access and customer interaction. Advisors can access information instantly, receive real-time coaching, and personalise engagement at scale.

AI has the potential to capture and distribute institutional knowledge, enabling average performers to operate closer to the level of top performers. This goes beyond efficiency to expanding capabilities.

As customer expectations continue to rise, shaped by experiences outside of insurance, the ability to combine human judgment with AI-driven insight becomes a powerful differentiator.

In this context, the role of the advisor evolves. Those who embrace AI as a partner become more valuable, not less. Those who resist it risk being left behind.

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