Insurance CEOs see AI gains, but few expect transformation

Insurance executives are buying into AI, but not the fantasy that it will remake the business overnight. KPMG’s Insurance CEO Outlook found that 44% of 110 insurance CEOs across 11 markets expected agentic AI to deliver significant improvement, yet only 5% said it would be transformational, a sharp sign that carriers still want practical gains, not hype.

That split matters because the survey covered leaders at organizations with more than $500 million in revenue, the people deciding how fast new technology can move from slide deck to production. KPMG’s 2025 Insurance CEO Outlook was the 11th edition of the firm’s CEO Outlook series, and it pointed to a sector that is optimistic but guarded. Eighty-two percent of insurance CEOs were confident in their company’s growth prospects, up from 74% in 2024, while 78% were confident about industry growth.

The place where that optimism is going is clear. KPMG said 73% of insurance CEOs were prioritizing AI investments to streamline underwriting, claims and customer experience. That is the language of controlled adoption, not open-ended experimentation. For P&C insurance carriers in particular, the likely first wins are the workflows that already sit close to rules, review steps and human approval, where agentic systems can handle repetitive work, connect back to oversight and still fit regulated operating models.

The report also showed how tightly AI strategy is tied to operating discipline. Seventy-seven percent of insurance CEOs identified workforce transformation and AI upskilling as both a top constraint and an opportunity for future growth, while 83% were focused on strengthening risk management and cyber resilience. That combination suggests insurers know the technology stack will only scale if it is paired with governance, auditability and staff who can supervise it well enough to satisfy compliance teams and regulators.

KPMG also said insurers were looking to strategic M&A to consolidate, scale and add new capabilities in AI, insurtech and specialty lines. That gives the outlook a broader market context: technology spending is not being treated as isolated innovation, but as part of a push for operating leverage and expansion. The message for software vendors and buyers alike is straightforward. The carriers that move first will be the ones that can prove AI improves underwriting, claims and service without breaking control of the process.