According to a recent report by Oxbow Partners, insurance companies aiming to gain a competitive advantage from artificial intelligence (AI) must prioritize enabling better human judgments rather than simply automating processes. The report argues that while AI can enhance efficiency, the true value lies in augmenting underwriters and claims handlers to make more informed decisions.

"The race to deploy AI in insurance has often focused on cost reduction and process automation," the report states. "However, our analysis indicates that sustainable competitive advantage comes from using AI to improve the quality of judgments across the value chain."

Oxbow Partners highlights that insurers leveraging AI for decision support—such as risk assessment, pricing, and claims evaluation—can outperform those using AI solely for automation. The report recommends investing in training and data quality to ensure AI tools effectively complement human expertise.

The findings underscore a shift in strategy for the insurance industry, where technology is increasingly viewed as a partner to human intelligence rather than a replacement. As the sector continues to digitize, the ability to integrate AI into judgment-intensive roles will likely become a key differentiator.