Insurers Cut Jobs, AI Explains Only Part of the Picture

Legal & General plans to cut around 1,000 positions by mid-2027, nearly 10% of its workforce, according to an email sent by CEO António Simões to employees on Wednesday (23). The British insurer and asset manager is starting with a voluntary redundancy program in the UK, does not rule out compulsory layoffs, and spares the asset management division. Simões’ justification was structural: the company needs to become leaner after a decade of growing too complex. Artificial intelligence is not mentioned in the argument.

After consulting firms and banks, this wave reaches insurers, and the sector shows more clearly than the other two the risk of attributing all personnel cuts to AI.

Three Cuts, Three Reasons

In Germany, Allianz Partners, the travel insurance and assistance arm of Allianz, plans to eliminate between 1,500 and 1,800 positions in 12 to 18 months, primarily in call centers in Germany, France, Spain, and the UK, according to reports from Süddeutsche Zeitung confirmed by Reuters in November 2025. This represents about 8% of a unit of 22,600 people, approximately 14,000 of whom assist customers and handle claims by phone. Here, AI is the stated reason: automated systems take over routine customer service.

In Switzerland, Helvetia Baloise, born from a merger completed in December 2025, aims to cut between 2,000 and 2,600 positions by 2028, with 1,400 to 1,800 in the country and 260 to 330 in Germany, seeking an annual savings of 350 million Swiss francs. The driving force is the merger.

In the UK, Legal & General cuts for simplification: it has already sold the builder Cala and merged its asset management units. Three companies, three causes, and only one of them fits entirely into the thesis that AI is replacing office work.

The Counterargument in Its Best Form

In the United States, BLS employment data shows a decline in the insurance sector in August, driven by the insurers themselves. Julie Hill, dean of the law school at the University of Wyoming, cited by Insurance Business, does not attribute the decline primarily to AI: for her, much of the losses come from pressure on margins, and payroll is the first expense cut when profits tighten.

The argument is serious, but the timeline weakens it. The Fed raised interest rates from near zero in 2022 to 5.33% in mid-2023 and kept them there for almost all of 2024, a period during which employment in finance and insurance grew. Cuts began in September 2024, and it was precisely during this relief phase that job losses accelerated, according to the same publication. Margin explains the start of the cycle; it poorly explains the current moment.

The enthusiasm for AI also misfires. The Evident AI Index for insurance, which tracks 30 of the largest insurers in North America and Europe, recorded a 32% increase in AI specialist roles over a year, which now represent nearly one in every 50 employees, while the total workforce of these companies shrank by 2.2%. It’s a profile shift, not a collapse: insurers are hiring those who build and oversee systems and are ceasing to replace those who processed volume.

The Distinction the Debate Ignores

The useful question is not how many jobs AI eliminates, but which layer of work shrinks. Where AI is the stated cause, as in Allianz Partners, the cuts affect phone support and routine claims processing, high-volume, low-variation work. Where the cause is merger or complexity, as in Helvetia Baloise and Legal & General, the cuts impact headquarters, duplicated functions, and management layers. Both movements show up combined in the same employment statistics, and summing them produces a conclusion that neither supports alone.

Geography follows the same logic. Allianz Partners cuts in four European countries simultaneously because customer service is a standardized process, replicable at any center. Helvetia Baloise concentrates cuts in Switzerland because that’s where the two merged headquarters are located. For service providers operating call centers and back offices for insurers, from nearshore and offshore hubs, the first pattern is what comes first in the contract, as it is the work that the insurer has already outsourced for being repetitive.

Where to Look Next

The next relevant figure comes from the balance sheets themselves. Insurers attributing gains in their combined ratio to automation of claims rather than premium adjustments will be saying something that a layoff announcement does not: whether AI is genuinely reducing cost per policy or merely serving as justification for a restructuring that would have occurred anyway.