Most insurance executives see AI as a competitive issue, yet relatively few organisations have built the data, workforce capabilities and strategic direction needed to produce clear returns.
According to KPMG International’s report, Unlocking AI value in insurance: A leader’s guide to AI-enabled transformation, 77% of insurance leaders believe failing to respond to AI could undermine competitiveness within five years.
At the same time, 44% believe their organisation ranks among the top 25% of insurance AI leaders.
The gap becomes clearer when looking at how insurers are using the technology. Some 71% use AI mainly for content generation or routine task automation, keeping adoption concentrated around existing workflows rather than new sources of revenue.
Most AI spending follows the same pattern. The bulk of budgets goes toward operational and back-office efficiency, while only 5% to 10% is allocated to new products or revenue-generating opportunities.
Weak data, unclear returns slow insurance AI programs
Insurers also report problems measuring the financial impact of AI investment. Only 11% describe their view of AI return on investment as very clear, leaving most organisations without a strong measure of whether spending is producing the expected business results.
Data presents another constraint. Just 11% of insurers say they have a strong data foundation and governance, even though AI applications depend heavily on the quality, accessibility and management of underlying information.
Strategic direction remains limited as well. Only 18% say they have a clear view of how AI supports their strategy and vision, with leadership in agreement on execution.
Workforce readiness is even lower. Just 8% rate their employees as highly proficient with AI tools, suggesting insurers are investing in technology faster than they are developing the skills needed to use it across the organisation.
AI ownership remains concentrated in technology teams
Responsibility for AI is also often kept within technology departments. KPMG found that 45% of insurers place AI ownership with the technology function alone.
That structure can keep AI focused on deployment and automation rather than broader changes to products, customer experience and operating models.
KPMG’s research suggests insurers are spending heavily on improving current processes while committing a much smaller share of investment to new commercial opportunities.
The findings point to a disconnect between how seriously insurers view AI and how far they have progressed in using it across the business. Executive concern is high, but clear returns, strong data foundations, workforce proficiency and shared strategic direction remain uncommon.
The research was conducted between 20 and 29 May 2026 with insurance leaders across 20 countries and six regions, representing organizations with 500 or more employees across all major insurance sub-sectors. The report also draws on KPMG’s Transforming the Enterprise 2026 research, which included 53 insurance respondents in senior transformation leadership roles.
