AI insurance: The $7 trillion rebuild

Allianz detected a fraudulent claim in 2024 when AI tools revealed a customer’s edited photo of a damaged van had been previously posted online without damage. The incident highlights how AI-powered fraud detection, like that developed by Austin-based Ravin, can verify real damage and prevent payouts to scammers, who increasingly use manipulated images to exploit insurance systems. The $7 trillion insurance industry faces growing pressure to modernize, with AI offering solutions to manual workflows and low public trust. Founder Eliron Ekstein of Ravin notes that while insurers handle vast sums—some underwriting tens of billions annually—adoption of AI remains slow due to legacy systems and regulatory caution. Global insurtech investments surged 19.5% in 2025, with 78% of late-year funding directed toward AI-driven innovations, up from 42% in Q4 2024. Corgi Insurance, an AI-native carrier based in San Francisco, became the first fully automated insurer approved in the U.S. in July 2025, achieving $40 million in annual revenue by automating text-heavy tasks like contract interpretation and regulatory reporting. CEO Nico Laqua explains that AI excels at repetitive language-based workflows, replacing roles traditionally filled by thousands of human workers in claims processing and underwriting. Despite progress, AI insurtechs face challenges, including strict regulations that demand bias-free models and high computational costs to ensure accuracy. The industry’s reliance on legacy systems and the need for rigorous validation slow adoption, though frontier AI advancements are pushing venture capital toward insurtech investments. Experts like Ekstein argue that while the potential rewards are massive, patience and compliance with financial sector standards remain critical hurdles.