Insurance firms are increasingly tying workforce reductions to the integration of artificial intelligence and automation, even as research indicates these cuts may not improve returns from the technology as expected.
A staggering 80% of organizations that have implemented autonomous business strategies have reported workforce reductions, according to Gartner. However, companies that see significant benefits from such technologies are cutting jobs at almost the same rate as those with minimal or negative outcomes.
Since late 2024, insurers, brokers, and health plans have collectively shed tens of thousands of jobs. Several organizations have candidly pointed to AI and automation as reasons for their restructuring initiatives.
Acrisure, for instance, announced plans in May 2026 to cut 2,250 jobs—approximately 11% of its global workforce. This decision follows a previous reduction of 400 accounting and operational roles in October 2025, focusing primarily on U.S. operations.
Similarly, Allianz is reportedly set to eliminate up to 1,800 roles in its travel insurance sector as AI takes over manual functions. Munich Re's ERGO division also anticipates a workforce reduction of around 1,000 jobs by 2030 due to the automation of traditional insurance operations.
Peter McMurtrie, an expert from West Monroe’s insurance practice, emphasizes that these changes shouldn't simply be viewed as machines replacing human workers. Instead, automation is reshaping the skills and knowledge insurance professionals need.
“The industry has automated repetitive tasks for over a decade,” McMurtrie states. “AI is fast-tracking this process while enhancing the quality of automation. This shift is redefining the expertise required for the remaining roles, which increasingly demand complex decision-making and customer engagement skills.”
Operational functions characterized by repetitive tasks are likely to face the most significant changes. McMurtrie highlights areas such as transactional claims processing, customer service, and underwriting support as ripe for technological advancement, signaling a shift in the nature of work rather than a decrease in demand for seasoned professionals.
According to Gartner analyst Helen Poitevin, while workforce reductions might release funds, they do not guarantee a return on investment from AI. Organizations that see improved returns tend to invest more in staff training, redesigned job roles, and operational frameworks that enhance oversight and scaling of autonomous systems.
McMurtrie's view is that effective insurers leverage efficiency gains not merely to cut costs but to reinvest in AI and digital technology. “It's a twofold approach,” he explains. “Every insurer faces pressure to manage expenses, yet the most resilient companies invest those savings back into capabilities that will keep them competitive.”
This self-funding model, however, relies on the realization of anticipated savings. Bain & Company’s 2026 Automation and AI Pathfinder Survey found that nearly 40% of companies reporting AI cost reductions missed their savings targets, achieving less than 10% savings against ambitious goals of 11% to 20%. Despite this, 90% of respondents plan to boost their AI budgets, with many intending to fund generative and agentic AI initiatives using savings from prior automation efforts.
Combining job reductions with unanticipated savings risks leaving organizations potentially undermanned before new systems can effectively manage the workload. Gartner experts caution against preemptive layoffs or hiring freezes based solely on projected AI advantages, urging a more cautious approach until technologies are operational.
Rather than halting hiring altogether, the trend seems to be shifting towards a more selective hiring process, prioritizing candidates who can blend technical acumen with deep insurance knowledge.
“We're witnessing a transformation in the type of talent needed in the industry,” McMurtrie notes. “While the sector continues to recruit for roles in AI, data analytics, engineering, and digital expertise, it also invests in upskilling existing professionals.”
“The future lies with insurance experts who can merge deep industry insight with technological proficiency, rather than specializing in one or the other.”
