3 ways industry leaders are transforming insurance for an AI-native future

The insurance industry is at an inflection point. Climate volatility, rising costs, and capital constraints are converging to put pressure on profitability, portfolio strategy, and underwriting performance. In this moment, artificial intelligence is becoming a core competency for insurers that want to stay competitive and unlock new value.

To explore what’s next, Federato CEO Will Ross hosted a fireside chat with industry leaders, including Carlin Carnahan, Head of Insurance at Celent North America, and Mark Breading, Partner at ReSource Pro. 

The discussion focused on why 2026 is a critical year for AI adoption, how legacy systems are holding carriers back, what it means for an insurance platform to be truly AI‑native, and where forward‑looking insurers are finding the most value today. Here are 3 highlights from their discussion.

1. AI isn’t just another tech cycle; it’s redefining how insurance work gets done

The panel emphasized that AI isn’t following the same arc as past technology trends like cloud or mobile. This moment is different. It’s not about incremental gains; it’s about rethinking core insurance workflows.

“We're now in a world where even senior executives are using tools like ChatGPT,” said Will Ross. “The intuitions they're forming about what should be possible are driving real change.”

Carlin Carnahan added, “We can now use broader, non-siloed data to drive decisions. That's a big shift.”

The bottom line: this is a foundational shift. Insurers need to go beyond experimentation and build systems with AI capabilities at the core, not as an afterthought.

2. Legacy systems are holding insurers back, and patchwork fixes won't solve it

Legacy infrastructure remains a key barrier to AI success. As Ross noted, “You can't bolt AI on top of a system that takes seven minutes to return a rate. Latency matters when you're trying to respond to a broker in seconds.”

Carnahan agreed: “These systems were built to manufacture policies, not to underwrite risk.”

Real-time decisioning and AI-powered workflows demand new architecture. That means rethinking everything from product definitions to how data flows across teams and tools.

3. AI success starts with workflow redesign, not tool accumulation

Layering AI on top of old workflows is a recipe for missed expectations. The panel made it clear that getting value from AI requires redesigning how work gets done.

“ChatGPT is amazing,” said Carnahan, “except that it's not traceable, repeatable, or reliable enough to make critical decisions on its own. AI should provide inputs that humans or algorithms can act on, not be treated as a silver bullet.”

Ross reinforced the point: “You can’t deliver a real-time AI experience on a foundation that takes 14 API calls and seven minutes to return a rate.”

For carriers, the priority should be clear. Organize your data, modernize product definitions, and embed AI into newly designed workflows, not legacy ones.

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From regulatory readiness to the realities of AI adoption, check out the full webinar on demand for insight on how leading insurers are building for the future of insurance.