Insurance CEOs Talk Gen AI, Growth, Workforce Strategies

A much higher percentage of insurance chief executives say that generative AI is a top investment priority for their firms than peers in other industries, according to a survey report published by professional services firm KPMG.

Roughly eight-in-10 insurance CEOs—81 percent—are prioritizing generative AI investments, while just 64 of CEOs across all sectors globally are similarly inclined to put gen AI at the top of their investment lists, KPMG said.

According to KPMG’s 2024 CEO Outlook, when it comes to employment and growth strategies, responses from insurance industry leaders are more in line with those leaders in other sectors, with most respondents in insurance and other sectors saying they don’t expect their workforces to grow very much over the next five years. In fact, some 60 percent of CEOs expect their organization’s headcount will increase less than 5 percent over the next three years. For CEOs across all sectors and countries, the comparable figure was 58 percent.

(Editor’s Note: Insurance sector response tallies are separately published in the 2024 CEO Outlook report. They were provided to Carrier Management by a KPMG representative.)

Still, insurers are poised to grow their businesses—through mergers and acquisitions. More than half, 51 percent of insurance CEOs, have expressed a high appetite for M&A over the next three years. Similarly, across all sectors, 49 percent of U.S. CEOs said they have a high M&A appetite and will likely undertake acquisitions that have a significant impact to their overall organization over the next three years.

Just under one-third of the 120 insurance CEOs surveyed by KPMG, or 32 percent, identified M&A as “the most important strategy for achieving organizational growth objectives over the next three years.”

Importantly, all CEOs responding to the KPMG survey are CEOs of large companies, reporting annual revenues of more than $500 million.

The report is based on survey responses from 1,325 CEOs in 11 key markets (Australia, Canada, China, France, Germany, India, Italy, Japan, Spain, UK and U.S.) and 11 key industry sectors (asset management, automotive, banking, consumer and retail, energy, infrastructure, insurance, life sciences, manufacturing, technology and telecommunications). Nearly one-third of all the companies surveyed between July 15 and August 29, 2024 had more than $10 billion in annual revenues.

Breaking down the insurance respondents, KPMG said that 48 of the 120 insurance CEOs are based in the U.S., with 31 percent in the life insurance sector, 30 percent in property/casualty, 19 percent in health, 10 percent in reinsurance and another 10 percent from the broker community.

The report also features responses to questions about the economic environment, preparedness for cyber attacks and ESG strategies.

Drilling down on the Gen AI topic, more insurance CEOs (21 percent) consider faster data analysis as the top benefit of implementing the use of generative AI than CEOs overall (9 percent).

Asked about the top functional areas where CEOs plan to invest in gen AI over the next three years, 68 percent of the insurance CEOs said their earmarking investments to the information technology function, 60 percent selected finance and accounting, and 58 percent indicated that some Gen AI investments would be for the sales and marketing function.

Across all sectors, 72 percent of CEOs surveyed by KPMG said Gen AI will not fundamentally impact the number of jobs at their companies but will require upskilling and redeployment of existing resources.

Asked about other aspects of talent management, most CEOs—78 percent of insurance CEOs and 79 percent of all CEOs—are envisioning a shift to in-office work environment in the next three years. Only 21 percent of insurance CEOs foresee a hybrid environment playing out in three years and just 1 percent said workplaces will be fully remote.

According to KPMG’s report on all CEOs, this vision is very different from the one CEOs has earlier this year when 34 percent of CEOs said in-office work was on the three-year horizon and 46 percent were leaning toward hybrid workplaces.

Like 86 percent of their executive peers across industries, 84 percent of insurance said they will reward employees who regularly come into the office with favorable assignments, raises, and promotions.