Intelligent insurance

AI is transforming the insurance industry

KPMG conducted an extensive research program, interviewing executive leaders across eight key global markets to understand the impact of AI on the insurance industry. The emergence of generative AI, along with the next wave of autonomous and agentic AI systems, is unlocking entirely new possibilities for innovation across the sector. Our research provides a detailed blueprint for insurance organizations to harness AI’s potential value.

At-a-glance insights:

Insurers have high expectations

0%

believe that Insurance firms that embrace AI will develop a competitive edge over those who do not

66%

expect a moderate to very high ROI

But the pressure is on to prove ROI

0%

face significant pressure from shareholders to show immediate ROI on AI investment

AI spending will increase significantly

0%

will increase the percentage of global budget spent on AI

of which

66%

say up to 20 percent.

and

34%

say 20 percent plus.

Building trust is a major concern—and priority

46%

of leaders have reservations about whether AI can be trusted while only

25%

fully trust AI within their organizations

82%

recognize the importance of establishing robust frameworks, policies and processes for regulatory compliance to ensure responsible AI implementation

Leadership goals for AI adoption focus heavily on operational gains rather than strategic value

How to realize value from your AI transformation journey

To address these challenges, KPMG introduces the three phases of AI value — a framework designed to guide insurers through the AI adoption journey. This phased approach provides a structured roadmap, helping insurers prioritize investments, align initiatives with business goals, and position themselves effectively in the age of AI in insurance.

The Enable phase focuses on enabling people and building AI foundations. Organisations appoint a responsible executive, create an AI strategy, identify high-value use cases, boost AI literacy, align with regulations and establish ethical guardrails. AI pilots are launched across functions, while cloud platforms and pre-trained models are leveraged with minimal customisation.

The Embed phase integrates AI into workflows, products, services, value streams, robotics, and wearables, delivering greater value. A senior leader drives enterprise-wide workforce redesign, re-skilling and change, embedding AI into operating models with a focus on ethics, trust and security. AI agents and diverse models are deployed, supported by cloud and legacy tech modernisation, while enterprise-wide data enhances operations.

The Evolve phase evolves business models and ecosystems, using AI and frontier technologies like quantum computing and blockchain to solve large sector-wide challenges. AI orchestrates seamless value across enterprises and partners. Emphasizing ethics and trust with real-time security, this phase uplifts human potential with broad and deep workforce training, fostering a creative, innovative and value-driven future.