Why insurers need strong AI operations, governance and an AI control tower Accelerating AI adoption with governance, operational monitoring and AI control tower capabilities Why insurers need strong AI operations, governance and an AI control tower2 Executive summary AI is expected to be a top focus for insurance companies over the next three years with 68% of US insurance chief risk officers (CROs) prioritizing it in the 2025 EY/IIF Global Insurance Risk Management survey.1 Its influence extends across every function of the insurance industry, including IT, human resources, finance, actuarial, underwriting and claims. The 2025 ServiceNow AI maturity index shows that only 14% of insurance companies are AI pacesetter even though data-driven insurance carriers can achieve significant efficiency gains through AI, and their books of business benefit the most by improving risk selection and building trust with their policyholders.2 Biased decision-making, unpredictable model behavior and other failures can lead to substantial brand damage and a loss of trust and profitability. To mitigate these risks, boards and executive teams require transparency regarding AI usage and associated risks throughout the organization. This transparency is essential for maintaining appropriate oversight and protecting the brand. To harness the full potential of AI, insurance companies must establish strong governance frameworks and align AI initiatives with organizational goals. US CROs identified the use of generative AI (GenAI) as the area requiring the most CRO attention over the next five years, with 43% rating it as the transformation and growth initiative that demands the greatest focus.3 Orchestrating AI governance and operational monitoring across the enterprise within a cohesive system is crucial to instill confidence in executive teams and boards, allowing them to accelerate AI adoption while quantifying its business impact and ROI. 1 EY/IIF Global Insurance Risk Management survey, 2025. https://www.ey.com/content/dam/ey-unified-site/ey-com/en-gl/ insights/insurance/documents/ey-gl-risk-managements-strategic-opportunity-05-2025.pdf 2 ServiceNow AI maturity index, 2025. https://www.servicenow.com/content/dam/servicenow-assets/public/en-us/doc-type/ resource-center/white-paper/wp-enterprise-ai-maturity-index-2025.pdf 3 EY/IIF Global Insurance Risk Management survey, 2025. https://www.ey.com/content/dam/ey-unified-site/ey-com/en-gl/ insights/insurance/documents/ey-gl-risk-managements-strategic-opportunity-05-2025.pdf 3 Why insurers need strong AI operations, governance and an AI control tower Our responsible AI principles give leaders a decision-making framework to scale AI with confidence. AI presents significant opportunities for innovation. However, insurers must commit to responsible AI practices, navigating the complexities of algorithmic decision-making. In the recent EY Responsible AI Pulse survey, the most common risks caused by inadequate controls are noncompliance with AI regulations (57%), negative impacts to sustainability goals (55%) and biased outputs (53%).4 As agentic AI becomes more prevalent in the insurance industry, the risks and the need for controls are more critical than ever. Organizations must establish and uphold effective governance to address these risks by clearly defining specific threats and potential impacts while updating current risk and security processes. Governance and oversight should be regularly updated to address evolving AI risks, improve oversight and better support business goals. Risk management and the need for governance Reference: Responsible AI in financial services | EY MENA 4 How can responsible AI bridge the gap between investment and impact, 2025. https://www.ey.com/en_gl/insights/ai/how-can- responsible-ai-bridge-the-gap-between-investment-and-impact 4 Why insurers need strong AI operations, governance and an AI control tower Enabling AI governance approvals and workflows The nine steps below represent best practices for AI approvals and workflows, following a continuous cycle.