How Personal Auto Companies Are Strategically Evolving in the Age of AI

• By: Olivia Overman
• March 15, 2026

Affordability in the personal auto insurance market has been a concern for a number of years due to rising repair costs, medical inflation, vehicle technology complexity and increasing litigation.

However, “after several volatile years, rate activity is beginning to settle but claim severity and driving behavior continue to put pressure on affordability,” says Brenda Castellano, senior vice president at National General.

By combining smarter product design, more proactive client engagement and the adoption of artificial intelligence (AI), carriers and agents are tackling both affordability and efficiency challenges for their personal auto clients.

However, as spending on AI continues and its capabilities are leveraged, carriers must take meaningful advantage of these tools, ensuring the benefits are passed on to both agents and consumers.

AI can use behavioral data and driving analytics to tailor premiums to the individual, according to Salesforce. This model rewards good habits and creates a more equitable pricing structure than traditional demographic-based underwriting.

Importantly, these tools can process and interpret data related to general trends, specific incidents and individuals in a fraction of the time and expense required just a few years ago, quickly recommending actions for underwriting, advisors, policyholders and customers, according to a report by PwC.  

“I’m excited about it and how it’s helping us work with independent agents more effectively by reducing friction and touches that are needed for mundane tasks,” says Mike Grove, senior vice president of auto product state management at Liberty Mutual Insurance.

“For example, in our underwriting space, we might have had somebody digging into an email note and then responding, leading to delays for agents,” he explains. “With AI, we’re able to do much simpler tasks more efficiently, allowing us to have more time to get on a call for a more complex situation with agents.”

Essentially, “it is about getting routine tasks done more efficiently that don’t require us to interrupt agents or have them wait for a call back,” Grove says.

“We’re using it [AI] more for efficiency internally and making sure that we’re providing a consistent experience,” Grove says. “From an agent standpoint, we’re already seeing signs that we’re creating more streamlined interactions, allowing us to free up more capacity to be there when agents have a question.” 

But as carriers adopt AI to manage and grow their personal auto book, they must adapt internally. For example, responsible governance of AI technologies is critical to ensure safety-critical decisions are made and the clear rules, oversight and accountability are identified, particularly for brokers and agents as they attempt to provide trustworthy advice that maintains the integrity of the carrier’s reputation and capital, the PwC report said.

“As these tools evolve, strong governance and human oversight remain essential to ensure transparency, compliance and trust,” Catellano says.

When insurers increasingly embed and rely on AI in core functions, including underwriting, pricing and claims management, they face scrutiny from regulators, customers and the public about how they’re using the technology, according to PwC. This makes responsible AI governance an urgent priority, and carriers need to specifically address and mitigate operational, bias and regulatory risk, the report says.

Meanwhile, state regulators are issuing guidelines on AI use and application, which shape internal controls and documentation practices, according to PwC.

“We are getting a lot of questions about how we use AI, as well as bulletins and information from state regulators,” Grove says. “We are always focused on making sure we’re in compliance with regulatory guidance when using this technology.”

Olivia Overman is IA content editor.