A new report by KPMG reveals that more than half of insurance sector CEOs expect high-impact M&A deals to affect their businesses, a proportion higher than in any other sector surveyed.
Scaling Up and Private Capital Interest
Huw Evans, Partner and head of insurance at KPMG, explained that firms are increasingly looking to scale up as they invest more in technology and talent. Smaller players are also doubling down on investments to optimize their businesses. Additionally, private capital interest in the insurance market continues to flow in, driving M&A activity across the ecosystem.
AI Investment Remains a Priority
While 73% of respondents agreed that AI is a top investment priority, this figure is down from 81% in 2024. However, 67% of CEOs expect a return on their AI investments within three years, up sharply from 21% in 2024. Evans noted that after significant investment in AI innovation, boardrooms are now demanding tangible results. The pace of technological change means CEOs expect concrete benefits, moving from small proof-of-concept experiments to integrating AI into broader change initiatives.
Cybercrime: The Biggest Threat to Growth
The report highlights cybercrime as a major concern, with 83% of insurers citing it as one of the biggest threats to growth. Evans pointed out that insurers sell cyber insurance to the economy but must also protect themselves from cybercriminals attracted to the sector's wealth. His team is focusing on real-time threat monitoring and identity management to prevent backdoor access. Firms are conducting more real-time resilience assessments, as they cannot rely on outdated evaluations. Cybercriminals constantly innovate, so companies are staying on top of the latest attack trends to repel threats.
