Here’s the word from KPMG, who see more acquisitions on the horizon this year in the insurance sector;
Insurance CEOs are expressing robust confidence in the face of market volatility, according to the KPMG 2025 Insurance CEO Outlook, this confidence is underpinned by a strategic focus on scaling artificial intelligence, pursuing high-impact mergers and acquisitions, and embedding ESG into core business strategy to drive long-term value.
The report, which surveyed 110 global insurance CEOs, reveals an industry that is moving decisively to turn disruption into opportunity, transforming operations to become more resilient, efficient, and innovative.
CEOs bullish on growth and deals
Despite economic headwinds, 82 percent of CEOs are confident in company growth, up from 74 percent in 2024, and 78 percent are confident in industry growth. This optimism is matched by the most aggressive M&A appetite of any sector surveyed, with 50 percent of insurance CEOs planning high-impact deals in the next three years, to achieve scale to manage regulatory costs for cyber and ESG, and to expand into new markets. This strategic approach underscores the industry’s determination to capitalize on disruption, positioning insurers for sustainable growth and increased competitiveness in the years ahead.
AI: From priority to profitability
AI is now a central pillar of insurance strategy, with 73 percent of CEOs naming it a top investment priority. Notably, 44 percent expect Agentic AI to profoundly reshape their businesses, due to it’s potential to streamline underwriting, purchasing policies, claims management, and customer support, with its adoption in call centers helping to efficiently direct inquiries and assist clients.
The industry’s approach to AI has rapidly evolved from experimentation to action. Today, 67 percent of insurance leaders anticipate seeing a financial return on their AI investments within one to three years, a dramatic jump from 21 percent last year. Insurers are moving to scale AI across the value chain, from underwriting and claims processing to customer service, with the goal of driving efficiency and creating a competitive edge. However, ethical challenges (56 percent) are cited as the single biggest obstacle, highlighting the industry’s focus on building trust as it deploys these powerful new tools.
Building an insurance workforce for the future
The rapid integration of AI is fundamentally reshaping the insurance workforce. A significant 77 percent of CEOs see AI workforce readiness as a critical factor for growth, placing a premium on talent strategy. The industry is focused on a dual approach: hiring new talent with specialized AI skills while simultaneously upskilling the existing workforce to collaborate effectively with new technologies. Over half (54 percent) plan to hire new talent with AI and tech capabilities. By investing in AI-ready talent, the insurance industry aims to foster innovation, increase operational efficiency, and achieve sustainable growth as the sector becomes more digital.
From compliance to competitive advantage
The insurance industry is increasingly viewing Environmental, Social, and Governance (ESG) criteria not just as a regulatory requirement but as a core driver of business strategy. 72 percent of CEOs report that sustainability is now embedded in their business models. Leaders are moving beyond compliance to actively innovate, with half of respondents (50 percent) developing new products and services that address the energy transition and enhance climate resilience. AI is seen as a key enabler in this effort, with 85 percent of CEOs believing it can help identify opportunities for resource efficiency and advance their sustainability goals.
“Insurers are on the front foot, turning market uncertainty into an opportunity for bold action. CEOs 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. This isn’t just a tech story; it’s a talent story, with a huge focus on preparing their people for a future where human expertise is augmented by AI.”
says Dr. Frank Pfaffenzeller, Global Head of Insurance, KPMG International
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