Wipro Report: 81% Insurers to Boost AI Budgets, Underwriting Set for Overhaul

Wipro Limited has released its latest industry report titled "The AI Advantage: Building Tomorrow’s Insurance Enterprise", showcasing the accelerating integration of Artificial Intelligence (AI) in the insurance sector. Based on inputs from 100 senior executives at U.S.-based insurance companies with revenues exceeding $500 million, the report offers insights into the shifting priorities and growing reliance on AI technologies.

AI Takes Centre Stage in IT Budgets

The report finds that 81% of insurance firms plan to increase their AI spending within the next year. Moreover, companies expect AI’s share of their IT budgets to rise sharply—from the current 8% to 20% in the next three to five years. This growth is fueled by a growing realization of AI's potential in boosting efficiency, enhancing personalization, and improving competitiveness.

Underwriting Sees Rising AI Adoption

Underwriting is emerging as a critical area of AI application. AI’s ability to process vast volumes of structured and unstructured data allows for more accurate risk assessments and faster decision-making. However, only 46% of respondents have extensively implemented AI in underwriting workflows, signalling significant room for expansion.

Firms anticipate that AI will soon bring transformative benefits to underwriting—68% expect better risk assessment and cost savings, 65% foresee improved regulatory compliance, and 62% believe it will enhance customer satisfaction and retention.

Challenges in AI Integration and Governance

Despite the optimism, insurers face several hurdles in adopting AI. One major issue is integration with legacy systems. About 71% of respondents cited difficulties in merging AI with their existing technology infrastructure. To overcome this, 65% of firms are adopting a phased approach to AI implementation.

Governance is another concern. Nearly 21% of insurers—and 44% of smaller firms—still lack formal AI policies, exposing them to compliance and reputational risks. As AI regulations evolve, the absence of structured usage frameworks could lead to significant regulatory challenges.

Need for Talent and Cross-Functional Collaboration

To maximise AI’s benefits, insurers are focusing on organisational alignment. 41% of respondents are strengthening collaboration between AI teams and underwriters. Additionally, 47% are investing in upskilling their workforce and hiring specialised AI talent to ensure their organisations are future-ready.

“AI adoption is no longer optional, it is essential to future success,” said Ritesh Talapatra, Vice President and Sector Head for Capital Markets and Insurance, Wipro Limited. “As firms that drive enterprise-wide AI adoption start to reap the flywheel effects, those slower to adapt will risk being left behind. Investing in a strong data, governance and technical foundation, and aligning AI initiatives to shared business objectives will be critical to success. For firms starting on the journey, prioritizing quick wins and investing in building the foundation necessary for scale will be the key. Ultimately, the industry will need to recognize that AI is not just an innovation, it is the new foundation of success in insurance.”

Also Read: India Poised to Surpass Japan as Asia’s Second-Largest Life Insurance Market!

Conclusion

Wipro’s report highlights a pivotal moment for the insurance industry as it navigates the path toward AI-driven transformation. While the commitment to increasing AI investment is clear, success will depend on overcoming challenges related to integration, governance, and talent. With the right strategies in place, AI could redefine underwriting and customer engagement across the insurance value chain.

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