AI in insurance market projected to reach $154 billion by 2034

The global artificial intelligence market in the insurance sector is projected to grow from $13.45 billion in 2026 to $154.39 billion by 2034, according to data from Fortune Business Insights. This represents a compound annual growth rate of 35.7%. North America held a dominant 39.96% market share in 2025, driven by the adoption of advanced analytics and digital tools.

Insurers are utilizing AI to modernize legacy systems and automate workflows in areas such as claims processing, underwriting, fraud detection, and customer service. Machine learning is being used to analyze historical data to identify anomalies, while conversational AI provides automated customer support.

However, the rise of agentic AI—systems that can execute decisions across applications without human pause points—presents significant governance challenges. Current oversight frameworks, often based on weekly or quarterly reviews, struggle to keep pace with machine-speed execution. This mismatch creates potential risks, similar to the challenges faced by financial markets during the transition to electronic trading.