Fragmented AI Undermines P&C Underwriting, Federato Finds

Property and casualty insurers are pouring money into artificial intelligence to sharpen underwriting, monitor portfolios and improve operating efficiency. But AI delivers limited value when data, underwriting guidelines and decision tools remain scattered across legacy systems. Federato’s research argues that integration — not simply spending — determines whether technology can translate portfolio strategy into frontline decisions, an increasingly important issue as carriers expand products and distribution channels while trying to keep risk appetite and underwriting execution aligned.

Federato released its 2026 State of P&C Insurance Technology report on July 21, based on a survey of 750 U.S. professionals at carriers, managing general agents and MGA aggregators. While 91% of executives said they had real-time portfolio control, only 27% of underwriters agreed, a 64-percentage-point gap. Organizations that fully embedded AI into underwriting workflows were 3.6 times more likely to achieve genuine portfolio control than those layering it onto fragmented legacy systems. The report also found employees lost five hours a week to manual coordination, costing an estimated $10,145 annually per worker.