Three-quarters of insurance CEOs now prioritize AI investment
Nearly 73% of insurance CEOs have made AI a top investment priority, according to new KPMG research. The technology is spreading across underwriting, claims processing, onboarding, and customer service operations.
Yet results remain mixed. While 92% of financial services companies have generated some profit from AI, only 32% report returns of meaningful scale.
The gap between investment and returns
Insurance leaders remain optimistic despite the slow start. Two-thirds expect AI-derived returns within one to three years-up sharply from 21% two years ago. The same proportion plan to allocate 10-20% of their budgets to AI.
KPMG noted that insurance boards and executives have made progress understanding AI as a business strategy rather than just an IT tool.
What's driving adoption
Productivity and efficiency gains remain the primary draw. Companies also see value in improved data quality and AI data analysis capabilities.
But concerns persist. Compliance and security risks are holding back investment at some firms. A growing number also worry about becoming too dependent on Big Tech vendors.
Early movers versus laggards
Slower-moving insurers risk falling behind. Companies with limited AI proof-of-concepts often prioritize building foundational capabilities-quality data infrastructure and scalable systems-over immediate returns.
Riccardo Altenburg, Tech, Data and AI Lead for Insurance at KPMG, said: "As AI moves from experimentation to enterprise capability, organizations that build a foundation that is scalable with quality data are best positioned to realize sustained value."
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