Have you ever seen a team with an amazing playbook but zero practice time? They know all the plays on paper, but when the whistle blows, nobody knows where to go. It’s chaos.
Well, it turns out that’s exactly what’s happening with AI in the business world right now, and it’s a big deal for us in insurance. Companies are rushing to write the rules for using artificial intelligence, but they’re forgetting a critical step: actually getting ready to follow them.
A recent study just put some hard numbers to this feeling, and honestly, they’re pretty eye-opening. Let’s break down what’s going on, because this isn’t just some tech trend—it’s a fundamental shift in how we manage risk.
The Great AI Disconnect: Planning vs. Reality
Here’s the headline: a new global risks forecast from Sedgwick, which surveyed a bunch of Fortune 500 executives, found a massive gap between good intentions and real-world readiness.
Get this: seven out of ten organizations say they’ve set up formal AI oversight committees. That sounds great, right? It shows they’re taking it seriously. They’ve got the cross-functional teams and the fancy charters.
But here’s the kicker. When asked if they were actually prepared to deploy AI capabilities safely and effectively, only 14% said yes.
Fourteen percent.
Let that sink in. There’s a whopping 56-percentage-point gap between having a committee and having the ability to execute. It’s like having a detailed blueprint for a skyscraper but only a handful of workers and a few rusty tools. The plan exists, but the power to build it just isn't there yet.
This isn’t just a small hiccup. It shows that for most companies, AI governance is advancing on paper while the practical, on-the-ground capabilities are seriously lagging behind.
So, What’s Holding Everyone Back?
You might think the biggest hurdle would be the technology itself. That the AI is too complex or the systems are too old. And while 67% of companies are actively upgrading their systems, the technology isn't the main problem.
Surprisingly, the real roadblocks are much more human.
When asked about their biggest challenges, executives pointed to things that are all about people and process:
- The dizzying pace of change: AI is evolving so fast that it’s hard to keep up. By the time you’ve written a policy, the tech has already moved on.
- Executing the game plan: It’s one thing to write a governance framework. It’s another thing entirely to get hundreds or thousands of employees to understand and follow it.
- Data privacy complexities: AI runs on data. Managing that data responsibly, especially in a highly regulated field like insurance, is a massive headache.
On top of that, you’ve got regulatory uncertainty and the simple, human challenge of managing change. These aren’t IT problems; they’re organizational ones. It’s about communication, training, and culture.
What Does “Being Prepared” Actually Look Like?
This is where the rubber meets the road. Having a committee is step one, but it’s a small step. Real readiness involves building the infrastructure to support your good intentions.
The study found that companies are still in the very early stages of this build-out.
- Less than half (48%) are even in the process of creating AI "guardrails"—the practical rules that guide day-to-day use.
- Only 41% have a dedicated team responsible for AI governance. For everyone else, it’s likely just another task on someone’s already-full plate.
- And a tiny 12% are bringing in external consultants for guidance.
This tells us that most organizations are trying to figure it out on their own, often without dedicated resources, while the technology continues to sprint ahead. It’s a recipe for things to go wrong.
Why This is a Huge Deal for Insurance
Okay, let's bring this home. Why should we in the insurance world be paying close attention?
As Sedgwick put it, “AI isn’t just another technology trend; it’s a seismic shift rewriting the rules of risk and claims.”
I couldn’t agree more. AI is creating tension everywhere you look. It’s the pull between incredible opportunity and brand-new risks. It’s the balance between human expertise and machine efficiency. It’s the struggle between safety and security.
Think about using AI to process claims. The opportunity for speed and accuracy is massive. But what’s the risk? An algorithm could introduce a hidden bias, leading to unfair outcomes and major compliance headaches. We need the efficiency, but we can't sacrifice fairness. That’s the tension.
Success in this new world isn’t just about buying the best software. It’s about getting three things to work in perfect harmony: your people, your policies, and your technology. Think of it like a three-legged stool. If your people aren’t trained, your policies are unclear, or your tech isn’t secure, the whole thing comes crashing down.
So, while it’s great that companies are forming committees, that’s just the starting line. The real race is about closing that 56-point gap and making sure we’re not just writing the playbook, but that our team is actually ready for game day.
