AI Is Reshaping the Insurance Industry, Defense Counsel Can’t Lag Behind

The rapid deployment of artificial intelligence (AI) in the insurance industry is reshaping expectations across the entire legal ecosystem, including outside defense counsel.

Insurers have integrated AI into core operational workflows; underwriting, claims routing, fraud detection, and customer communications. Sameena Safdar of Thomson Reuters writes that the attorneys who represent them are now measured against a new standard: the pace and precision that AI-enabled operations demand.

The adoption of AI in insurance is no longer experimental. United Kingdom-based Aviva deployed more than 80 AI models across its claims operation, reducing liability assessment time for complex matters by 23 days, improving routing accuracy by 30%, and cutting customer complaints by 65%. The savings exceeded $79.3 million in 2024 alone.

Another large carrier now generates approximately 50,000 claims-related communications daily using AI. Industry research confirms that AI leaders in the insurance sector have produced more than six times the total shareholder return of slower-adopting peers over the past five years.

The practical implications for insurance defense counsel are equally striking. An experienced attorney using professional-grade AI can now complete in hours what previously required days. AI can analyze expert reports, mine discovery, develop deposition strategy, and conduct multi-jurisdictional legal research in a single integrated workflow.

For insurance defense practitioners, the takeaways are direct. Outside counsel spend decisions at insurer clients will increasingly favor firms that operate at AI speed.

Research by Professor Daniel Schwarcz at the University of Minnesota Law School found lawyers using professional-grade AI worked 20–30% faster at 20–30% higher quality. The greatest gains came among experienced practitioners equipped to fact-check and correct AI when needed, and use the results for sophisticated analysis.

Firms that delay AI adoption risk competitive obsolescence, while those that invest in professional-grade tools stand to meaningfully expand the value they deliver to sophisticated insurer clients.