Middle East Insurers Embrace Next-Gen AI to Compete Beyond Underwriting

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Insurers across the Middle East are accelerating their digital transformation agendas, with artificial intelligence (AI) playing an increasingly central role—not only in boosting operational efficiency but also in enabling strategic differentiation. Amid evolving regulatory landscapes and rising customer expectations, insurance providers are reevaluating where AI can create the most value across the insurance value chain.

While underwriting and risk profiling remain the most positively impacted functions, new data reveals a shifting focus. A Q3 2025 poll conducted by GlobalData via its Verdict Media platforms, 45.8% of insurance professionals still view underwriting and risk profiling as the area most enhanced by AI. Yet this figure reflects a notable decline from 2023, indicating that other functions are rapidly gaining traction. Claims management (20.3%) and customer service (17.6%) are now emerging as key beneficiaries of AI investment.

Customer service, in particular, saw a 6.2 percentage-point jump in perceived AI impact, while product development—historically underutilized—more than tripled, rising from 1.9% to 7.2%. Meanwhile, claims management experienced only a modest decline, reinforcing its steady strategic importance.

“The data points to a broader, more balanced AI deployment strategy across insurers,” said Charlie Hutcherson, Associate Insurance Analyst at GlobalData. “While underwriting remains core, its rate of innovation is slowing amid regulatory scrutiny and challenges around data quality and fairness. In contrast, AI-powered customer engagement tools and agile product design are seeing increased momentum.”

These shifts reflect a maturing perspective within the insurance sector—one that acknowledges AI’s potential beyond efficiency gains. In areas such as customer service, AI is already driving higher satisfaction rates through improved triage and more accurate, real-time responses. Meanwhile, in product development, insurers are leveraging AI to close coverage gaps, accelerate go-to-market timelines, and better anticipate emerging risks.

“As the industry becomes more competitive, the pressure to differentiate is intensifying,” Hutcherson added. “Those insurers that approach AI not just as a tool for automation but as a strategic enabler—balancing innovation with transparency and compliance—will be best positioned to build long-term trust and value.”

For insurers in the Middle East and beyond, the message is clear: AI strategy must evolve from siloed use cases to a more integrated, value-driven framework—one that is as focused on customer relevance and market adaptability as it is on operational gains.