Insurance CEOs leaning into AI, M&As, survey finds

By Staff Reports

Insurance carrier CEO's are more energized about AI than their counterparts in other industries and identified M&A as the most important strategy for achieving organizational growth objectives over the next 3 years.

Those were among the key findings of the 120 insurance CEOs surveyed globally as part KPMG's 2024 U.S. CEO Outlook Pulse Survey

"Insurance CEOs recognize the importance of anticipating and foreseeing change in a swiftly transforming digital landscape," said Scott Shapiro, KPMG U.S. Sector Leader for Insurance. "Dealmaking activity and investing in cybersecurity and Gen AI capabilities are key focal points for insurance leaders, as they aim to position their organizations for sustained success."

Growth prospects

According to the survey, 60% of CEOs expect their organization’s headcount will increase less than 5% over the next three years. More than half (51%) expressed a high appetite for mergers and acquisitions (M&A) over the next three years. Nearly one-third (32%) of insurance CEOs identified M&A as the most important strategy for achieving organizational growth objectives over the next 3 years. About one in five (21%) selected advancing digitization and connectivity across the business as the top operational priority to achieve growth objectives over the next three years.

Generative AI

Despite economic uncertainties, a substantial amount (81%) of insurance CEOs consider generative AI a top investment priority, compared to just 64% of CEOs across all sectors.
More insurance CEOs (21%) consider faster data analysis as the top benefit of AI, compared to only 9% of CEOs overall.

Information technology (68%), finance and accounting (60%), and sales and marketing (58%) are the top three functional areas where CEOs plan to invest in generative AI over the next three years.

Cybersecurity

Of the CEOs surveyed, 54% stated they are well-prepared for a cyber-attack; 64% of insurance CEOs are increasing their cybersecurity investments to protect operations and intellectual property from AI threats, compared to 73% of all CEOs.

Confidence in insurance organizations' cybersecurity ability to keep up with rapid AI advancements varies, with 43% feeling confident compared to 55% of CEOs across all sectors.

Workforce

When it comes to the debate over remote work options, 78% of CEOs envision an in-office work environment in the next three years, with hybrid (21%) and fully remote (1%) trailing behind.
Of the CEOs surveyed, 84% stated they are likely to reward employees who regularly come into the office with favorable assignments, raises, and promotions.