Property and casualty insurance companies are pouring billions of dollars into artificial intelligence programs to streamline their operations, but there’s a return on these investments they weren’t bargaining for: consumer mistrust.

People shopping for the right insurance plan are surprisingly likely to take their business elsewhere if they learn that an insurer is using AI. This is often because they have little idea how the technology is being used and often assume the worst, such as wondering whether it’s just a cold, calculating machine making important coverage decisions.

P/C insurers can reverse this trend if they stop relying on vague claims about innovation and leave off with the high-tech jargon. They can instead take the time to show consumers exactly how AI is being used and how it amounts to better coverage with fewer delays, more responsiveness and less waste.

To make it happen, insurance companies should get in the habit of overcommunicating about their use of AI. Those that embrace this technique will be the ones to win the hearts and minds of skeptical consumers and get the most ROI from their AI investments.

The Communication Imperative

For P/C insurers, communicating effectively about AI begins with understanding the reservations consumers have.

For starters, many worry about opaque technology systems determining their claims and premiums with no explanation. Consumers also fear that, at their moment of need after a car accident or home disaster, it will be algorithms rather than empathetic humans that field their inquiries.

The extensive data collection needed to feed AI systems raises concerns among consumers about information security and usage, and the idea of algorithmic bias has many wondering if they could be treated unfairly.

Some of these reservations stem from the fact that many insurers talk about internal efficiencies instead of how AI actually helps their customers.

Here are three techniques insurance providers can use to flip the script:

1. Talk About the Customer

P/C insurers should map their communication around AI to specific moments that will matter to the customer, as opposed to how it benefits insurance company operations.

For example, in property damage claims processing:

Don’t say: “We use AI to process claims faster.”

Instead say, for example: “After your recent hailstorm, our AI system analyzed satellite and radar data to verify the storm’s impact on your neighborhood. Based on this analysis, we proactively authorized temporary roof repairs—no adjuster visit needed—helping get your home protected within hours in many cases, rather than waiting days.”

In homeowners policy underwriting:

Don’t say: “Our AI helps determine your premium.”

Instead say, for example: “Our AI system identified that your home’s proximity to the newly built fire station reduces your average emergency response time by four minutes. We’ve automatically adjusted your premium to reflect this reduced risk, saving you $175 annually without requiring you to call us or file paperwork.”

2. Use Explainable AI to Achieve Transparency

Explainable AI is a critical component for building consumer trust, and that’s why several industries are striving to implement it. XAI, as it is known, provides clear justifications for AI-based decisions, allowing customers to understand how and why specific determinations were made.

Clear communication is foundational to XAI and is especially important when insurers explain premium changes. Specificity creates trust. The following is an example of the type of communication that helps consumers trust the technology:

“Our weather analysis shows wind events over 45mph have increased by 36 percent in your area over the past 18 months. Homes with extended eaves over 24 inches—like yours—have filed 52 percent more wind damage claims during these storms. Installing hurricane straps on your roof trusses typically costs about $1,275 and could reduce your annual premium by up to $328. In some cases, this upgrade may also qualify you for a lower wind damage deductible—depending on your insurer and policy.”

Details like these—which of course vary by insurer, region, customer and policy—transform abstract rate calculations into concrete insights with specific metrics tied to the homeowner’s actual property characteristics, location-specific risks and mitigation opportunities.

This is the way to demonstrate that the AI is working with relevant, personalized data rather than making generic assumptions.

3. Show That AI Is Purpose-Specific

Consumers are more accepting of AI when they understand its specific use, particularly in areas like severe weather monitoring. Insurers should highlight these whenever possible.

For example, when communicating about home insurance premium changes, consider this AI-powered explanation: “Your premium changed for three specific reasons: 1) Our analysis of 549 water damage claims in homes with your specific plumbing configuration (copper pipes installed 1985-1990) shows a 28.7 percent higher risk of basement leaks after 30+ years; 2) The installation of three new fire stations within 4.2 miles of your property has reduced average emergency response times by 6.3 minutes, decreasing severe fire damage probability by 14 percent; and 3) Your roof’s age (17 years) combined with the 43 percent increase in severe hailstorms in your specific ZIP code has increased potential damage estimates by $22,840 based on similar claims. Installing impact-resistant roofing would reduce your premium by $423 annually.”

Showing purpose specificity makes AI seem less like a monolith that’s impossible to understand and more like what it really is for the insurer: a powerful analytical tool that helps tailor premiums to the individual customer.

Bringing AI Communication to Life: Three Scenarios

Below are three common scenarios for P/C policyholders and examples of effective communications that will build their trust around the issue of how AI is used—without even mentioning AI.

Home Water Damage Claim. A policyholder discovers water damage from a burst pipe. Upon reporting the claim via the insurer’s app, they receive this message:
“We’ve analyzed your uploaded photos using our AI-powered damage assessment system. Based on similar claims in your area and the urgency of your situation, we’ve pre-approved emergency water mitigation—no inspection required. A remediation team has been dispatched and will typically arrive within two hours to begin protecting your home.“

Commercial Auto Fleet Pricing. A fleet manager receives this quarterly update:
“Your fleet’s risk score improved by 17.3 percent this quarter. Our telematics system identified a significant reduction in hard braking at four high-risk intersections—a clear sign of improved driving behavior. These improvements, along with other risk factors, contributed to a $3,875 reduction in your quarterly premium.”

Small Business Property Risk Assessment. A retail store owner receives this notification: “Our predictive maintenance system has identified that HVAC systems similar to yours in buildings of your age and location typically fail within 30-45 days once electrical patterns like the ones we’re observing show up. To help prevent any business interruption, we recommend servicing your system immediately. As part of your policy, we’ve arranged a priority appointment with a certified technician at no additional cost. This proactive service can help save businesses like yours an average of $9,000-$12,000 in emergency repairs and lost revenue, based on similar cases.”

P/C insurance has reached a pivotal crossroads. AI has the potential to revolutionize underwriting, claims and customer service, but so far, consumers aren’t fully convinced.

This can change if insurers embrace a fundamental shift in how they communicate. The focus must shift from the complexity of the technology to the tangible benefits policyholders will experience. They must strive for explainable AI, and overcommunicate with customers on how it is being used. They must reassure consumers also that–whatever AI is accomplishing–there will always be a human being in the loop.

Every communication about insurance AI should answer the customer’s fundamental question: “How does this help me?” What they care about is getting their car fixed faster after an accident. They care about preventing water damage before it destroys family photos. They want to pay a fair price that accurately reflects their actual risk.

AI makes all of this possible—but it’s the responsibility of the insurance industry to effectively communicate its impact and benefits.