Growth optimism drives insurance M&A and AI investment
"Insurers are on the front foot, turning market uncertainty into an opportunity for bold action." That's the tone set in KPMG's 2025 Insurance CEO Outlook, published January 2026.
The report surveyed 110 global insurance leaders, including UK executives across general insurance. Confidence is moving up while costs and regulation keep pressing margins.
Confidence is rising
- 82% of CEOs are confident in their company's growth over the next three years (up from 74% a year earlier).
- 78% are confident in industry growth, despite inflation, regulatory change and rising claims costs.
M&A to build scale and manage costs
Half of insurance CEOs expect to pursue high-impact M&A over the next three years. The goals are clear: build scale, spread regulatory costs tied to cyber and ESG requirements, and break into new markets and specialty lines.
- Map a three-year deal thesis: where scale creates margin (claims, tech, data, distribution) and where specialty depth creates advantage.
- Stand up an integration playbook early: target operating model, data/tech harmonization, and regulatory approvals across jurisdictions.
- Be carve-out ready: clean financials, standalone tech/data footprints, and transition services lined up.
AI moves from pilots to payback
AI has shifted from experiments to outcomes. 67% of CEOs expect ROI on AI within one to three years, up from 21% in 2024. Nearly three-quarters now rank AI as a top investment priority, with active deployment across underwriting, claims, fraud detection and customer service.
Winning teams will pair tech with talent. 77% say an AI-ready workforce is critical to growth, and 54% plan to hire new AI and technology talent. Upskilling, data quality and model governance will separate early results from expensive delays.
- Prioritize high-ROI use cases: triage in claims, straight-through processing, pricing segmentation, and fraud scoring.
- Fix data foundations: policy, claims and external data pipelines; lineage; quality SLAs.
- Set guardrails: model risk management, privacy-by-design, bias testing and audit trails.
- Build the workforce plan: role design, training paths, and clear productivity targets per function.
- Decide "build vs buy" per capability; avoid vendor sprawl and duplicated tools.
"Chief executives are no longer just talking about technology. They are actively scaling it to make every part of their business - from underwriting to claims - smarter and more efficient." - Dr Frank Pfaffenzeller, Global Head of Insurance, KPMG International
What to do now
- Lock a 36-month M&A and AI roadmap with quarterly milestones and measurable financial impact.
- Tie AI investments to loss ratio, expense ratio and service metrics-not generic innovation goals.
- Fund data and integration upfront; it's cheaper than rework after deployment or post-deal.
- Prepare the organization: incentives, governance and change management that reward adoption.
For more detail on the survey and methodology, see KPMG's Insurance insights here.
If building an AI-ready workforce is on your 2026 plan, explore practical training paths by role here.
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