Insurers to Ramp Up AI Investment as CEOs Target Faster Returns

By Benadeta Mwaura - Reporter

Kenya, 23 January 2026 - A new KPMG Insurance CEO Outlook report shows that a growing number of insurance company leaders are planning significant investments in artificial intelligence (AI) this year, as they seek faster returns and greater efficiency.

According to the survey, about 73% of insurance CEOs now view AI as a top investment priority, a sharp jump from 2025.

Most of these leaders, roughly 67%, intend to allocate 10–20% of their budgets to AI projects and expect meaningful returns within one to three years.

Insurers are no longer just experimenting with artificial intelligence (AI); the technology is now being applied across core business functions to drive efficiency and better outcomes.

In claims processing, AI is used to analyse and validate claims, speed up approvals, and even automate payouts, reducing the time customers wait for compensation and minimising human error.

For underwriting, algorithms help insurers assess risk more accurately and set pricing that reflects real-time data, improving profitability while offering fairer premiums to clients.

AI is also transforming customer service and back-office operations, automating routine tasks and enabling faster responses to queries, which improves overall service quality and frees up staff for more strategic work.

In some cases, simple policies can now be completed online in minutes, and AI tools can auto‑approve eligible claims, for example, by analysing photos of vehicle accidents.

Industry research suggests that broader AI adoption could help insurers cut processing times, reduce costs and improve customer satisfaction, especially where data quality and digital platforms are strong.

Despite optimism, many CEOs are cautious. About 77% say that slow regulatory progress could limit their success, pointing to a lack of clear rules around AI ethics, data protection and compliance.

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Without firm regulation, they say, public trust and safe deployment may be undermined.

Skills gaps and data readiness also remain significant obstacles: insurers need talent with AI expertise and robust digital foundations to realise the full benefits of these technologies.

For Kenya’s insurance sector, stronger AI adoption could help address long‑standing challenges like slow claims handling and fraud, while enabling more personalised products and faster service.

Local insurers are already using automation tools to cut claim turnaround times and tighten fraud checks, a trend that aligns with the broader global move toward AI‑driven financial services.

But the pace of change will depend on both industry commitment and supportive policy frameworks, including investments in digital infrastructure and workforce skills, areas where African financial services are still catching up.

Insurance CEOs are boosting AI investment, shifting the sector from cautious experimentation toward operational transformation.

While promising faster returns and improved services, the move also raises questions about regulation, talent and ethical deployment as the industry navigates this new frontier.