Oxbow Partners says AI edge lies in better judgements

A new study from Oxbow Partners argues that AI use cases must go beyond minor efficiency gains if the benefits are going to compound over time.

The report, titled Compounding advantage with AI in commercial and specialty (re)insurance, was released July 14, 2026. It urges businesses to focus on three themes—shape, motion, and direction—to prepare for the coming changes.

Why insurers are investing in AI

According to the study, AI represents a “strategic” and “core” industry development, unlike the insurtech 2.0 wave that preceded it. That earlier wave, the authors say, largely failed to disrupt the market and ended up supporting incumbent carriers instead.

The authors, Chris Sandilands and Oliver Watts, argue that AI should be treated as central to a company’s future, not as a side project.

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Lessons from the insurtech 2.0 era

The study draws a sharp contrast between the last decade’s insurtech hype and today’s AI push. Insurtech 2.0, it says, promised disruption but delivered incremental improvements for established carriers.

Sandilands and Watts identify three themes that should guide business leaders: shape (the structure of the target organization), motion (the framework that enables AI to achieve that structure), and direction (the narrative used to drive change).

None of this is about a single roadmap. The study suggests a culture of constant strategic innovation and agility matters more than any fixed plan.

The central argument is that an organization’s existing culture determines how well AI will work for it. Companies that reward experimentation and learning will see progress accelerate. Those that punish risk or rely on rigid hierarchies will see AI reinforce their inertia.

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Culture eats strategy for breakfast

“The cliché that culture eats strategy for breakfast remains true and has become even more true as the information and decision making setting democratises,” the study states. Trust is critical, the study adds, and good culture breeds trust.

AI amplifies whatever company culture already exists. In firms that encourage responsible experimentation and learning, the technology speeds up progress, while in risk-averse or rigid hierarchies, it deepens existing inertia.

Leadership teams, the study concludes, need to build a culture that accepts uncertainty, tolerates uneven progress and values judgement over procedure.