Debunking AI Myths in Commercial Auto Underwriting

January 5, 2026

A practical look at how AI supports underwriting workflows, and why human judgment still leads.

By Kevin Carroll, Vice-President of Insurance and Transportation Solutions, ISB Global Services

Artificial Intelligence (AI) has become the insurance industry’s favourite headline. Whether you are attending a conference, reading a report or sitting through a vendor demo, it has become commonplace to hear bold claims about what AI will revolutionize next. Yet when speaking with commercial auto underwriters, a different picture often appears.

Many are unsure what AI actually means for day-to-day underwriting. Some worry it will automate them out of a role. Others expect it to solve every data challenge that slows underwriting down. Almost everyone wonders if AI can be safely applied to complex and high-severity commercial auto risks.

AI is a powerful tool, but it is widely misunderstood. When we separate fact from fiction, a clear and practical view emerges of where AI genuinely supports underwriting, and where human expertise remains essential.

Myth #1: AI Will Replace Underwriters

A common misconception is that AI will one day take over the underwriting function entirely. In practice, AI can’t replicate the judgment, negotiation or contextual understanding that commercial underwriting requires.

What AI can do is support underwriters by automating the labour-intensive work that slows the process: collecting documents, validating information, screening large volumes of data and flagging inconsistencies. When used well, AI gives underwriters more time for analysis, client conversations and strategic thinking.

AI handles the information. The underwriter handles the decision.

This balance also reflects what customers want. Recent industry research shows Canadians prefer insurance experiences that blend the speed and accuracy of automation with the reassurance and accountability of a human expert. AI may improve the process, but trust is built through human judgment.

Myth #2: AI Can Solve the Data Problem

AI is often positioned as a cure-all. In reality, AI is only as good as the data it is fed. Poor data quality, missing documents and manual entry errors create poor outputs. The expression “garbage in, garbage out” has become something of an automation mantra for a reason.

AI only delivers value when the underlying data is complete, structured, and fed from verified sources. Automated data-sourcing platforms make this possible by centralizing and standardizing the essential information underwriters rely on.

Reliable automation begins with reliable data. Without it, AI introduces more risk, not less.

Myth #3: AI Removes Human Bias

Another widespread belief is that AI eliminates bias. In practice, AI will often reflect the patterns and gaps that exist within its training data.

Two factors matter. First, the quality of the data must be accurate, reliable and consistently structured. This is crucial for any rule-based application of AI to produce fair and consistent outputs across large volumes of information.

Second, human oversight is essential. Underwriters must interpret AI results, challenge anomalies and ensure decisions remain fair and compliant. This is especially important in the Canadian regulatory environment, where transparency, auditability and defensible decisioning are mandatory.

Customers also want AI used responsibly. They expect clear oversight, ethical guardrails and the ability for humans to review and contextualize results.

Automation can standardize and improve workflows, but accountability must remain human.

Myth #4: AI Is Too Risky for Commercial Lines

Some underwriters believe commercial auto risks are too nuanced for AI. Yet many already use decision-support tools that rely on similar principles, such as rule-based analysis, pattern recognition and structured workflows.

The role of AI is not to make decisions. Its role is to surface better data, highlight potential issues early and speed up the steps that sit between submission and binding, with the added benefit of reducing risk.

Underwriters remain in control and can override any automated recommendation. For complex or specialty risks, this support is especially useful. AI gives underwriters more clarity before negotiating terms or setting conditions.

Myth #5: Everyone Else Is Doing It, and We Are Falling Behind

Competitive pressure and changing customer expectations are driving many organizations to consider AI adoption. But the fear of missing out can lead teams to pursue AI before addressing foundational gaps.

The reality is that most Canadian insurers are still early in their AI journey. Many are focusing first on workflow automation, document sourcing and data integration long before exploring more advanced AI applications.

The real competitive advantage is not rushing ahead. It is having a strong data foundation that AI is built on. Automation and data confidence come first. AI maturity follows.

Forward momentum comes from collaboration. Carriers that work closely with their technology, data teams and the right insurtech partners are better positioned to build the data integrity and workflow discipline that AI relies on. This requires organizational readiness, clear ownership of processes and the ability to measure results over time. It also calls for strong risk management, security and transparent communication to ensure AI is deployed safely and responsibly.

Where AI Supports Commercial Auto Underwriting

Commercial auto underwriters face rising pressure to work faster and with more precision.

When applied correctly, AI supports that work in key areas:

• Intelligent data retrieval: AI-enabled tools bring the right data to the underwriter at the right time, reducing the hours spent searching, collecting and validating information.
• Pattern recognition and risk signals: AI can identify trends or gaps across entire portfolios that manual processes might miss, helping underwriters spot emerging risks early.
• Rule-based consistency: AI can apply hundreds of eligibility rules in seconds, improving consistency and reducing the variability that appears in manual processes.
• Administrative relief: By automating repetitive validation steps, underwriters gain more time for analysis, client conversations and strategic decision-making.

Blending AI With Human Expertise: The Future of Commercial Auto Underwriting

The strongest underwriting environments will not be AI-driven or human-driven. They will combine both.

Automation & AI excel at:

• Collecting, validating and structuring data.
• Applying standardized rules that reduce inconsistency.
• Identifying issues early through intelligent flagging.

Human underwriters excel at:

• Navigating ambiguity.
• Understanding context.
• Applying judgment grounded in experience.
• Ensuring fairness and compliance.

Together, this creates faster, more consistent and more confident underwriting decisions.

From Myths to Progress

AI in commercial auto underwriting is neither a miracle solution nor a threat. It is a set of tools that, when built on accurate data and human oversight, strengthens the underwriting process.

The real opportunity lies in balance: human judgment supported by trusted automation. This leads to stronger risk selection, better portfolio performance and a smoother client experience.

The most successful underwriters are not waiting to see what AI will do next. They are asking what AI can help them do better today.

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About the Author:

Kevin Carroll is a seasoned executive with over 25 years in the Insurance IT sector, specializing in enterprise solutions and insurance information services. With extensive experience managing client relationships, he has effectively led sales, delivery, and management activities, ensuring exceptional service and value for clients. Kevin’s consultative approach to business development has consistently fuelled revenue growth across Canada and the US. Known for his deep expertise in insurance and financial services, he aligns solutions with client needs and thrives in collaborative environments, driving success for both clients and ISB Global Services.