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      The transformation gap

      Most insurers recognize the urgency of AI transformation. Investment is growing, executive attention is high, and new use cases continue to emerge. Yet our research suggests many organizations are still focused on deploying AI within existing processes rather than redesigning how value is created, delivered and measured.

      Based on global research with insurance leaders, this report explores the gap between AI ambition and business outcomes. It examines the barriers preventing organizations from realizing value, introduces a three-horizon framework for AI-enabled transformation, and outlines practical steps insurers can take to redesign customer experiences, operating models and future business models. The result is a guide for leaders looking to move beyond experimentation and unlock sustainable competitive advantage through AI.

      Key highlights

      Strategy & vision

      18% have a clear view how AI will enable their strategy and vision with leadership aligned on execution.

      Accountability

      45% of insurers place AI ownership with the technology function alone.

      Data foundations

      11% claim a strong data foundation and governance.

      Workforce readiness

      8% rate their workforce as highly proficient with AI tools.

      Value measurement

      11% describe their view of AI's return on investment as very clear.

      In insurance, the conversation is shifting from the potential of AI to the value it can deliver. The next step is to turn AI investments into practical solutions and tangible business value.

      Juha-Pekka Mylén

      Partner, Head of Financial Services

      KPMG in Finland

      The true competitive advantage of AI emerges only when the operating model evolves alongside agentic architecture and high-quality data: processes, roles, responsibilities and decision-making are redesigned with AI at the core.

      Jan Nyström

      Partner, Business Transformations

      KPMG in Finland

      From vision to value

      Insurers agree that AI will reshape the industry. From underwriting and claims to policy servicing and operations, insurers are deploying AI to increase productivity, automate routine work and improve operational efficiency. Yet most transformation efforts remain focused on optimizing existing business models rather than creating new products, services or revenue streams.

      More than three-quarters (77 percent) of insurance executives told us they believe that failure to respond to AI will undermine their competitiveness within the next five years. More than two-thirds go even further, saying that the greater risk today is moving too slowly on AI transformation versus moving too fast.

      Key areas of transformation focus

      Today: AI is improving operations and efficiency.

      Tomorrow: Leading insurers will use AI to redesign business models, customer experiences and new sources of growth.

      Insurers are making rapid progress deploying AI across their businesses, but most investment remains concentrated on efficiency and productivity gains. The next challenge is using AI not only to improve how the business operates, but to rethink how value is created, delivered and monetized.

      The path forward

      Closing the gap between ambition and outcomes requires more than technology adoption. Insurers require a clear view of where the business is headed and the discipline to build toward that future.

      • Look beyond today’s horizon
      • Reimagine future business models
      • Put the customer at the centre
      • Build journeys to outcomes
      • Align vision, operations, and measurement
      Download the report

      Unlocking AI value in insurance

      A leader’s guide to AI-enabled transformation
      Download the report

      About the research

      This report is based on new primary research commissioned by KPMG to understand how insurance organizations are navigating AI-enabled enterprise transformation.

      Findings are drawn from a hybrid qualitative-quantitative discussion board conducted between May 20 and 29, 2026, with 44 insurance leaders engaged across 20 countries and six regions, representing organizations with 500 or more employees across all major insurance sub-sectors. Thirty-two participants completed the discussion board in full, with a further 12 completing it in part. Where noted, this is supplemented by integrated analysis from the KPMG Transforming the Enterprise 2026 survey, which included 53 insurance respondents.

      Percentages throughout this report are based on this combined sample unless otherwise stated and may not always add up to 100 due to rounding.

      Our people

      Juha-Pekka Mylén

      Head of Financial Services

      KPMG in Finland

      Jan Nyström

      Partner, Business Transformations

      KPMG in Finland

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