Skyward’s AI insurance bet pays off amid funding surge

Skyward’s October AV push drew attention because it was not a cold start but the visible payoff from groundwork laid earlier in 2026. In January 2026, Skyward acquired Apollo Group Holdings, gaining ibott’s autonomous-vehicle and digital-economy underwriting business with “over a decade of experience in AV insurance,” a deal that positioned it to later launch a U.S. platform and made the October rollout look like a deliberate expansion of proven specialty capabilities rather than an experimental adjacency.

That framing mattered for market attention in October and November because Simply Wall Street cast the U.S. primary-market launch as a technology- and data-linked move that broadens distribution while supporting a “capital light” underwriting and fee-income narrative. By describing Skyward as extending ibott’s AV expertise into a full suite of U.S. solutions and linking underwriting, technology and data capabilities to a broader platform, the analysis helped place the launch—and then Skyward’s co-led $27 million Slingshot seed—inside a single growth story around AI-enabled embedded and specialty insurance.

The underwriting payoff from AI is not just better models but faster, cheaper execution inside existing insurance operations. Reinsurance News, citing Moody’s, says AI is already supporting underwriting and pricing and should improve productivity and reduce operating costs, but only for insurers with strong data infrastructure and redesigned processes; many still have to run AI alongside legacy systems before gains fully materialize, showing that data pipelines and workflow integration are the mechanism that turns AI into quicker pricing and more capital-efficient specialty underwriting rather than a standalone tool.

That mechanism is visible at the user level: a recent underwriting study found “Separately, 90% of leaders and 79% of underwriters said AI is improving the quality of underwriting decisions,” yet executives “most often pointed to systems and data quality as their chief obstacle, cited by 72% of leaders,” while “43% of underwriters instead blamed technology that fails to match how they actually work.” Even with “just 45% of Life and Health (L&H) organisations are using AI regularly today,” enthusiasm remains high, and Carrier Management notes that “In 2026, the NAIC is also piloting an AI Systems Evaluation Tool with 12 states to help regulators examine insurer governance, risk mitigation, data inputs and potentially high-risk AI models.”

The capital signal is no longer ambiguous: Gallagher Re’s Q1 2026 Global InsurTech Report found that “95.2% of all global insurtech funding in the first quarter of 2026 went to AI-focused companies,” showing investors have already concentrated the category’s funding around AI-enabled insurance bets. That investor focus is mirrored in public carrier conversations, where American Financial Group executives described AI as already improving claims efficiency and analysts pressed management on underwriting, pricing, loss ratios and expense trends, evidence that AI has become a mainstream operating and valuation topic rather than a speculative side theme.

The market case is also being validated by projected line growth and concrete underwriting action: ScienceSoft estimates the AI-specific insurance segment will expand from roughly $40 million in 2024 to $4.8 billion by 2032, an annual growth rate near 80%, even if it still reaches only about 0.34% of total commercial property and casualty premiums. That growth outlook is grounded in live risk signals, including a “262% rise in publicly documented AI incidents from 2022 to 2025,” Gallagher’s finding that one in five insurance professionals report insureds already suffering AI-linked losses, and ISO generative AI exclusions spreading to 4,078 records across 49 states, with 2,369 already in force.