General Insurance Article - AI adoption doubles across the Lloyds market in 12 months

Based on 39 responses from firms representing over 60% of Lloyd’s market stamp capacity, the findings reveal a significant shift in the market over the past 12 months, with AI adoption moving from limited experimentation to more widespread early-stage deployment.

In 2025, around 50% of firms reported limited or no AI implementation. Twelve months on, AI is now used across much of the market, with 93% of firms who responded having, or developing, formal AI frameworks to support adoption.

This reflects a clear transition from cautious exploration towards more structured and governed adoption, with firms prioritising oversight, accountability and risk management ahead of large-scale deployment.

Key findings from the survey include:

AI adoption accelerates sharply year-on-year

The survey highlights a clear step change in adoption across the Lloyd’s market.

In 2025, AI and machine learning adoption was described as in its infancy, with around 25% of survey respondents reporting the use of AI.  A year on, there has been steady progress across a number of functions such as underwriting, operations and compliance.

This growth is primarily driven by generative AI applications, such as ChatGPT or Microsoft Copilot, and internal productivity use cases, including summarisation, reporting and data processing. Despite this acceleration, these applications remain largely focused on efficiency gains, with limited deployment in core underwriting, pricing and claims decision making.

Governance frameworks become a clear priority

A defining shift over the past year is the rapid development of governance frameworks across the market.

Last year’s findings highlighted concerns around regulatory uncertainty and the absence of robust AI frameworks. In contrast, the 2026 survey highlights that governance is now firmly established as a priority, with the vast majority of responding firms implementing or developing structured frameworks.

Firms are embedding policies, oversight structures and controls ahead of scaled deployment, reflecting a more deliberate and risk-aware approach to AI adoption.

Human oversight also remains central to decision making, with over 60% of firms explicitly requiring mandatory review of AI-generated outputs, ensuring that AI is used to enhance, rather than replace, expert judgement.

While progress has been made, accountability and regulatory integration remain areas of ongoing development in the market.

Data risk moves to the top of the agenda

Despite progress in AI adoption and governance, the findings also show a clear shift in how firms perceive AI-related risks.

In 2025, data security and privacy were not consistently ranked among the top priorities. Comparatively, in 2026, data privacy, cybersecurity and third-party risk have now emerged as some of the most prominent concerns across the market.

This reflects growing awareness of the risks associated with scaling AI, particularly around data handling, third-party dependencies and system security. Around one in four firms still rely on general third-party risk management frameworks, rather than AI-specific provisions.

Concerns around data quality, bias and the reliability of AI outputs remain ongoing, highlighting the need for continued investment in validation, testing and assurance as use cases evolve.

Sanjiv Sharma, Head of Actuarial and Exposure Management at the Lloyd’s Market Association, said: “AI adoption across the Lloyd’s market has accelerated quickly over the past 12 months, but what’s encouraging is that governance is being built alongside it, rather than after the fact, with over 93% of those surveyed having a framework in place or being developed. What the survey clearly highlights is that the market is still early in its journey, but the foundations for responsible adoption are clearly being put in place.

There is no clear consensus across the market on where responsibility for AI governance should sit, with firms adopting a range of approaches across technology, risk and compliance functions.”

Wan Heah, Partner and Head of General Insurance at Barnett Waddingham, added: “The market is moving past experimentation and towards a more disciplined use of AI, with governance, data protection and validation now firmly in focus. The real test is ensuring these frameworks keep pace as AI applications become more complex.

There is no single blueprint for AI governance. Firms need to strike a careful balance between risk and opportunity and put in place practical, robust risk management strategies to support responsible adoption.”