Insurance CEOs boost AI with 67% eyeing returns in 3 years

Around 73% ranked machine intelligence amongst their main spending priorities.

The majority of CEOs from insurance companies remain cautiously optimistic despite ongoing economic uncertainty, climate risks and rapid technological change, with 82% of them saying they are confident in their company’s growth.

This was also higher than the 74% in 2024, whilst 78% are confident in the overall industry, according to KPMG International’s 2025 Insurance CEO Outlook.

KPMG said insurers in India are also focusing on governance, regulatory compliance and workforce reskilling as they expand their use of AI and digital tools. 

The report notes that investment in technology, talent and partnerships will be key to maintaining competitiveness as the industry continues to evolve.

The survey is based on responses from 110 insurance CEOs across life, non-life, reinsurance and composite insurers worldwide. It includes companies operating in segments such as auto, home, property and casualty, health, reinsurance and insurance broking.

At the same time, 83% identify cybercrime as the biggest threat to growth over the next three years.

Artificial intelligence (AI) remains a key priority across the sector. Around 73% of CEOs rank it as a top investment area, with 67% planning to allocate 10% to 20% of their budgets to AI, analytics, automation and generative AI. 

About 67% expect returns from these investments within one to three years, compared to 21% in 2024.

However, challenges remain. About 83% of CEOs say workforce readiness and skills gaps are limiting AI adoption. 

In addition, 56% cite ethical concerns, 51% point to data readiness issues, and 77% say regulation could slow down implementation.

Mergers and acquisitions are also expected to continue, with half of CEOs anticipating high-impact deals and 41% expecting moderate activity over the next three years.

Sustainability is becoming a core part of business strategy. Around 72% of insurers say sustainability is now embedded in their operations, with 81% improving ESG reporting and 77% strengthening climate risk modelling.

In India, these trends are reflected in strong premium growth, increasing demand for protection and retirement products, and rapid digital adoption across distribution, underwriting and claims. 

Insurers are moving from pilot projects to wider AI deployment to improve risk assessment, claims processing, fraud detection and customer service.