NAIROBI, Kenya, January 23 – A majority of insurance company chief executives are planning to significantly increase investment in artificial intelligence (AI), according to a new report by consulting firm Klynveld Peat Marwick Goerdeler (KPMG).
The 2025 Insurance CEO Outlook shows that 73 percent of insurance CEOs have ranked AI adoption as their top investment priority, while 67 percent plan to allocate between 10 and 20 percent of their budgets to AI.
“More than 73 percent of CEOs agree that AI is a top investment priority, and 67 percent expect returns from AI investments within one to three years, a sharp increase from 21 percent in 2024. In addition, 67 percent plan to allocate 10–20 percent of their budgets towards AI,” the report said.
KPMG noted that for many insurers, AI has moved beyond experimentation to become a key value driver.
“With the exception of a few mutuals, companies are seeking fast payback from AI investments to meet investors’ short-term expectations,” the report added.
Insurance firms are already deploying AI across several functions, including claims processing, where it is used to analyse and validate claims, speed up approvals, and enable automated payouts, as well as in algorithmic underwriting.
Beyond cost savings, insurers believe AI investments are critical to improving operational efficiency, particularly across customer-facing and back-office systems.
“Some simple policies can now be completed online within minutes, while AI can auto-approve many claims, such as car accident photos assessed by algorithms for severity and authenticity,” the report said.
However, despite the expected benefits, many CEOs remain concerned that deploying AI systems without clear regulatory frameworks could pose risks related to ethics, data readiness, security, and compliance, potentially undermining public trust.
“A large majority of CEOs (77 percent) believe the pace of regulatory progress could be a barrier to their organisation’s success, while the lack of AI regulation is cited as the second biggest challenge to AI implementation,” the report noted.
