One in Five Insurers Is Deploying AI While Cutting the Training Budgets to Make It Work, New Survey Finds

Record Industry Optimism Masks a Widening Gap Between Technology Investment and Operational Readiness, According to Covenir’s 2026 Insurance Operations Leaders Trends Report

BOSTON, MA, JUNE 9, 2026 — Insurance operations leaders are more confident about the industry’s future this year than last. They’re also more stretched, more pressured, and more likely to be sitting on data they can’t act on. And a growing number are deploying AI faster than they’re preparing the people expected to work alongside it.

Those are the central findings of Covenir‘s second annual 2026 Insurance Operations Leaders Trends Report, based on a February-March 2026 survey of 152 U.S.-based insurance operations decision-makers at carriers, MGAs, and Insurtechs.

Key Findings

• 70% of organizations have AI running in live operations, up from 58% one year ago, but 20% are simultaneously cutting training budgets while only 7% are protecting them
• 29% now expect outsourcing partners to have AI solutions embedded in their services
• 88% of ops leaders are optimistic about the industry’s future, up from 83% in 2025, but 65% say their teams are more stretched than they’ve ever been.
• 68% of organizations saw budget increases, yet the segment with the highest growth, mid-sized carriers with 500-999 employees, also reports the highest team strain at 83%
• 90% say they are confident their operations deliver on their brand promise but 42% say brand promise breakdowns most often happen at First Notice of Loss, the function most exposed to stretched teams and defunded training programs
• 81% say operational insights are critical to business success, yet 47% either aren’t using their data or can’t translate it into decisions

“Insurance operations leaders are doing something genuinely hard right now,” said David Squibb, President and CEO of Covenir. “They’re staying optimistic while absorbing real pressure, deploying AI while cutting the training budgets that make it work, and sitting on operational intelligence they know is valuable but haven’t yet built the infrastructure to act on. The organizations that close those gaps in 2026 are the ones that pull ahead, and the window is narrowing.”

The Tension at the Center of the Industry

Eighty-eight percent of insurance operations leaders say they’re optimistic about the industry’s future, up from 83% in 2025. But 91% of executives report their teams are more stretched than they’ve ever been, almost double that of managers or individual contributors. Budgets are growing too: nearly 68% of organizations saw increases. But the segment with the highest budget growth, mid-sized carriers with 500-999 employees, also reports the highest team strain at 83%, raising serious questions about where the investment is actually going.

AI Is Moving Faster Than the People Running It

Seventy percent of organizations now have AI running in live operations, up from 58% one year ago. But 20% are simultaneously cutting training budgets while only 7% are actively protecting them. The result is a widening gap between the technology being deployed and the people expected to use it.

There is another nuance that showed up in the data. Among organizations with AI in early deployment, the impact is landing where you’d expect: customer satisfaction and efficiency gains. But among the more advanced insurers who are running AI across multiple functions, a different pattern is emerging. Fifty-four percent of that group say headcount is where they plan to cut investment most in 2026, more than five times the rate of their less mature peers at 11%. This suggests that while AI isn’t yet driving mass elimination of jobs in insurance operations, that moment is getting closer as organizations mature in their AI adoption. This shift is also reshaping what insurers expect from their partners: 29% now say they expect outsourcing partners to have AI solutions embedded in their services, signaling that outsourcing is becoming part of their AI strategy, not just a cost line.

Data Collected. Decisions Deferred.

Eighty-one percent of leaders say operational insights are critical to business success. Yet 47% either aren’t using their data at all or are collecting dashboards they can’t translate into decisions. That gap represents one of the most significant and actionable opportunities identified in the report.

Where Brand Promise Breaks

Ninety percent of leaders say they are extremely or very confident their operations are delivering on their brand promise. But breakdowns do happen, and when they do, 42% say brand promise breakdowns most often happen at First Notice of Loss, the exact function most exposed to stretched teams and defunded training programs. In an environment where policyholder expectations are rising alongside premium rates, that’s a compounding risk that touches revenue, retention, and reputation simultaneously. The smallest insurers are the most vulnerable. Thirty percent of leaders at organizations with 1-199 employees say they aren’t confident their operations will deliver the experience their brand promises.

The full 2026 Insurance Operations Leaders Trends Report, including demographic breakdowns and segment-level analysis, is available at https://lp.covenirbpo.com/trends-2026.

About Covenir

Covenir is the WOW company redefining the outsourcing experience for insurers and other highly regulated organizations. Since 2015, Covenir has provided scalable outsourcing solutions including call center support, claims and back-office operations, print and distribution, virtual mailrooms, lockbox payment processing, and AI-enabled services that help organizations launch, grow, and scale with confidence. Serving more than 100 insurers, MGAs, Insurtechs, and other regulated businesses, Covenir operates as a true extension of its clients’ operations, combining empathy, compliance, and operational precision to create experiences that stand out. Covenir is a unit of Vencora, part of Constellation Software Inc. For more information, visit www.covenirbpo.com.