At a Glance

Questions on the role of AI in transforming European insurance have shifted from “if” to “how” and “how quickly” – and Upliift is playing a key role by scaling Insurtech software businesses that focus not just on technology but also on industry credibility and trustworthiness.

In what follows, we share our view that:

• AI adoption becomes mainstream: Over 50% of non-life and 24% of life insurers in Europe now use AI, embedding it across underwriting, claims, and customer service.
• Operational gains are tangible: AI-driven tools cut fraud and claim costs, speed up processing by up to 50%, and improve pricing accuracy and customer experience.
• Regulation drives responsible innovation: The EU AI Act and EIOPA guidance enforce transparency, data quality, and human oversight, creating a stable framework for progress.
• Scaling to the enterprise level remains a challenge: While specific AI use cases already deliver results, most insurers struggle to scale these successes across the entire business. Legacy systems, fragmented data, limited expertise, and unclear value frameworks slow the transition from pilots to full-scale impact.
• Upliift partners with InsurTech innovators for the long run: The secular trend on AI-driven transformation is in its early days and will take more than the next 2-3 years to fully play out – Upliift partners with InsurTech software companies over decades to drive these fundamental transformations

Artificial intelligence reshapes European insurance

Across Europe, artificial intelligence is becoming central to the insurance industry’s next chapter. What began as a series of experiments has evolved into a widespread movement to embed AI across underwriting, claims, customer service, and risk management.

EIOPA’s latest data shows that around half of non-life insurers and one quarter of life insurers already use AI in at least part of their operations. The trend is accelerating quickly. Within the next three years, those figures are expected to rise to 80 percent and 64 percent, respectively. For European insurers, AI is no longer a future possibility; it is a practical tool reshaping how the business works every day.

At Upliift, we see this transformation from the ground up. The companies we partner with are building software that allows insurers to analyse vast data sets, detect patterns, and make decisions faster, all while staying compliant with Europe’s demanding regulatory standards.

The Rise of AI in Insurance Operations

Artificial intelligence is reshaping how Europe’s insurers operate, from streamlining repetitive tasks to enhancing decision-making across the value chain. What began with early automation and analytics is now accelerating through the rise of generative AI, which is rapidly becoming part of everyday conversations in the industry.

The most advanced insurers are already using AI to automate high-volume processes, reduce costs, and improve accuracy.

• Fraud detection is one of the most mature applications. Machine learning systems analyse large data sets in real time to identify inconsistencies, helping carriers detect fraudulent or high-severity claims before payments are made. Some insurers report that AI-driven tools have reduced false positives and generated savings of millions of euros annually.
• Claims automation is another area of significant progress. Tools using computer vision and natural language processing assess photos, extract details from repair invoices, and automatically route claims to the right handler. In some cases, this has cut processing times by up to 50 percent.
• Pricing and underwriting are also being reshaped. Non-life insurers increasingly combine traditional actuarial data with new sources such as telematics, IoT sensors, and behavioural data. The result is more accurate risk selection, fairer pricing, and faster underwriting.
• Customer interaction is improving through AI-powered chatbots and virtual assistants that provide 24-hour support, respond to policy queries, and guide customers through renewals or claims. This results in faster, more transparent communication at lower cost.

At the same time, generative AI is opening the next frontier. Large language models are being tested by European insurers for drafting policy documents, answering customer queries, and assisting developers in writing internal code. While these pilots are still in early stages, the momentum is clear.

EIOPA’s ongoing research into generative AI reflects growing interest in its potential to automate communication-heavy processes such as regulatory reporting, claims correspondence, and underwriting documentation. According to recent industry surveys, more than half of European insurance executives believe generative AI will deliver measurable ROI within the next three to five years.

The greatest opportunity lies in augmenting rather than replacing human expertise, enabling teams to focus on complex analysis, judgment, and customer relationships while AI manages routine data processing.

Uneven adoption across the market

Despite rapid progress, AI adoption remains uneven. Non-life insurers, particularly in motor, home, and small commercial segments, are leading the way. Life and health insurers are moving more cautiously, partly because their products involve sensitive personal data and stricter rules on fairness and explainability.

In fact, research shows that only around 14 percent of European financial firms currently have a fully established AI ethics framework, and roughly half have not yet started formal governance programmes. This gap underscores a major challenge for the sector: building the systems and controls needed to use AI responsibly.

Regulators across Europe are watching this closely. EIOPA and national supervisors are encouraging insurers to adopt AI, but only under robust oversight. The aim is to foster innovation that remains transparent, traceable, and free of discrimination.

Regulation: balancing innovation with accountability

Hospitals often have limited resources to support new software implementations. No matter how innovative your technology is, it won’t gain traction without effective onboarding, support, and clinical buy-in. The difference between a successful rollout and a failed pilot often comes down to training, support, and local relationships. Companies that invest in these areas, or partner with organisations that can help, are much more likely to achieve sustainable, long-term adoption.

Europe’s regulatory framework for AI is among the most advanced in the world. The EU AI Act, which came into force in 2024, defines high-risk use cases that include life and health insurance pricing and risk assessment. Companies using AI in these areas must comply with strict requirements on data quality, transparency, and human oversight.

For non-life insurers, most AI applications fall under lower-risk categories, but the same principles apply. Insurers must ensure that systems are explainable, decisions remain traceable, and humans retain control over outcomes.

In 2025, EIOPA issued an Opinion on AI Governance in Insurance, providing practical guidance on how to integrate these standards with existing frameworks such as Solvency II, the Insurance Distribution Directive, and GDPR. The message from supervisors is clear: innovation is encouraged, but only when trust and fairness are protected.

Regulation is not an obstacle; it is a stabilising force. It gives insurers and their partners clear parameters for innovation and protects the reputation of the industry as it embraces new technologies. Europe’s insurance landscape is also far from uniform. It is made up of diverse local markets, each with its own business practices and cultural nuances. This diversity means that regulatory approaches and the pace of innovation can differ, requiring insurers to balance consistency with local adaptation.

Scaling AI in European Insurance

Europe’s insurance sector is entering the scaling phase of AI adoption. Pioneers have already shown that automation, predictive analytics, and generative tools can deliver measurable benefits. The next challenge is to embed these capabilities across the enterprise, integrating AI into every stage of operations, from product development to claims resolution. Insurers will need to move from pilots to repeatable models, linking AI directly to expense ratios, loss ratios, and customer-retention metrics. Governance must evolve alongside technology, making transparency and human oversight an integral part of the design.

EIOPA’s research confirms that AI can reduce costs, improve accuracy, and strengthen customer relationships, outcomes that align with European values of trust, fairness, and resilience.

For the industry to move from the “pioneer” phase to the “mainstream” phase, larger insurers must overcome four key challenges:

1. Legacy systems remain a major constraint. Many carriers operate decades-old platforms that struggle to handle modern data and algorithms, and integrating AI into these environments often requires substantial investment and re-engineering.
2. Data quality and silos present another barrier. AI depends on large volumes of consistent, well-structured data. Fragmented systems make it difficult to train accurate models or apply insights across business lines.
3. Skills and culture are critical. Surveys suggest that 78% of financial services firms in Europe feel they lack sufficient AI expertise, and only about one-quarter have formal training programmes. Moving from pilots to production requires strong leadership and a cultural shift within the organisation.
4. Measuring ROI remains a developing practice. Early adopters report average savings of 11%, or roughly $6.24 million, but many insurers focus on broader benefits such as improved customer satisfaction, more effective fraud detection, and better risk monitoring.

These challenges are not unique to any single market; they represent the natural growing pains of an industry in transition. At Upliift, we are proud to work with the founders and teams who make this transformation possible. By providing investment, guidance, and sector expertise, we help software businesses deliver the intelligence, efficiency, and reliability that define the future of insurance.

Upliift’s perspective: enabling responsible and scalable AI

At Upliift, we believe Europe’s insurers are on the right path. The focus on governance and resilience is not slowing innovation; it is creating the conditions for sustainable progress. The AI-driven transformation of the industry is still in its early stages and will unfold over many years, not just the next two or three.

“With the help of Upliift, we have redoubled our commitment to remaining a leader in technology for the insurance sector. We are very optimistic, to be honest.”
–Ángel Blesa, CEO of Codeoscopic

Upliift partners with InsurTech software companies for the long run, supporting founders who are building the tools that enable this fundamental shift. Our portfolio includes data platforms that ensure lineage and quality, model governance tools that provide transparency, and workflow solutions that integrate AI into underwriting and claims.

Europe’s diversity is a strength in this process. The continent is made up of distinct local markets, each with its own business practices, regulatory expectations, and cultural nuances. Upliift, and the software companies we invest in, embrace this diversity, recognising that problems are solved differently from one market to another.

The greatest long-term advantage belongs to insurers that combine three elements: clean and compliant data, strong model governance, and clear performance metrics. When these are in place, AI moves from a technological initiative to a true driver of business results. Our role as a Permanent Equity partner is to support these innovators for the long term, helping them build durable, well-governed businesses that serve the insurance industry responsibly; acting in the context of Europe’s regulatory frameworks rather than trying to bypass them. By aligning growth with accountability, we aim to accelerate the development of trustworthy AI across Europe.