Insurance chiefs are upbeat about growth prospects for 2026 even as they confront a squeeze from claims inflation, cyber threats and an accelerating regulatory burden, according to KPMG’s 2025 Insurance CEO Outlook. The report, based on a focused slice of KPMG’s broader CEO survey of 1,350 executives, presents views from 110 insurance CEOs across life, non‑life, reinsurance and broking groups.

Confidence and M&A appetite

KPMG reports that 82% of insurance CEOs are confident in their company’s growth prospects for the year ahead (up from 74% in 2024), and 78% are confident about industry growth. That optimism is matched by a notable appetite for consolidation: 50% of insurance CEOs expect to undertake high‑impact M&A in the next three years — a higher proportion than in any other sector covered by the global survey. KPMG says deals are being pursued to achieve scale, diversify product mix and acquire tech and data capabilities.

AI: funding, deployment and trust

Artificial intelligence is now a boardroom priority. According to KPMG, 73% of insurance CEOs rank AI as a top investment priority and 67% plan to allocate 10–20% of their budgets towards it. CEOs expect returns from AI investments within one to three years — a marked acceleration from 2024 — and 44% judge agentic AI capable of having a significant or transformational impact on operations.

But KPMG warns that ethical and governance issues are core implementation challenges. The report highlights “ethical challenges” as the single largest obstacle to AI adoption, and urges insurers to build model inventories and explainability frameworks so AI deployment preserves customer trust. As Jacques Cornic, KPMG’s EMA lead for insurance, notes in the report, “To get the most from AI, it’s important to identify how your AI models could create risks for policyholders or employees. This calls for an inventory of models that use AI, and a clear description of how you use data, to gain trust in the output.”

Cyber: the top growth barrier

CEOs put cybercrime and cyber insecurity at the top of their growth constraints. KPMG records 83% of CEOs identifying cyber as the biggest barrier to organisational growth, and 53% naming cybersecurity and digital resilience as their leading risk‑mitigation investment. The report emphasises that cyber claims and losses remain an escalating cost, and that cyber insurance is a fast‑growing but still challenging market given claim trends and pricing pressures.

Workforce and skills

CEOs see workforce readiness for AI as a critical constraint: 77% cite AI workforce readiness and upskilling as a top growth constraint, and 83% say AI is reshaping training and development. More than half of respondents plan to hire AI and tech specialists, and many expect hybrid working to endure. KPMG highlights the twin challenge of replacing retiring talent while developing AI‑native skills across the organisation.

ESG and resilience

Sustainability has moved from compliance to strategic priority for many insurers; 72% of CEOs report embedding sustainability within corporate strategy. The survey shows 50% of insurers developing products to support the energy transition and climate resilience. At the same time, 55% of CEOs say compliance and reporting are their top ESG priority, with scope‑3 and supply‑chain decarbonisation flagged as material hurdles.

Operational implications

KPMG draws out clear operational priorities for insurers: accelerate digitalisation and connectivity, invest in AI with strong governance and human oversight, shore up cyber resilience, and use M&A to fill capability gaps. The firm also recommends practical steps such as redesigning claims journeys to combine automation with human empathy and deploying AI for sustainability modelling and scenario planning.

KPMG’s insurance outlook concludes that while geopolitical and macroeconomic pressures persist - tariffs, inflation, claims cost inflation and regulatory change - CEOs broadly believe the sector can deliver profitable growth by balancing technology investment with workforce development, effective claims handling and robust governance. The report underlines a sector preparing to scale AI and deal activity, but doing so with an operational checklist that starts with cyber and trust.