Predicts 2025: Key AI strategies for insurance CIOs

AI will play a critical role in helping insurance companies succeed in their highly competitive industry in 2025. But implementing and managing AI tools can present serious challenges for insurance CIOs.

"According to a recent Gartner(R) Report, by 2029, insurance CIOs will spend 30% of their time managing machine employees". Meanwhile, their technical debt will grow—four times faster than conventional tech debt.

Still, CIOs will be under pressure to deliver: Successful adoption of AI will be a key performance measure for these leaders.

How can your team overcome these obstacles and make the most of AI for competitive differentiation? The Gartner report discusses challenging traditional strategic thinking and adopting more unconventional strategies.

Leaders in the insurance industry see AI as a game-changing technology—and many CIOs are investing significantly in AI tools. They are expanding their AI implementations beyond traditional data science into use cases that can enhance efficiency, boost productivity, and improve customer experiences.

However, relatively few organizations have developed a cohesive strategy for AI or integrated AI planning with business strategies. Merging AI and business strategies might be unconventional, but it is critical. As the Gartner report states,, AI “is no longer considered a ‘winning technology,’ but rather, the keys to business success.” Until companies bring AI and business strategies together, they won’t be able to realize the full value of AI.

As they work to integrate AI and business strategies, insurance CIOs will also have to rethink how they manage their teams. The availability of new generative AI (GenAI) tools is accelerating the ongoing transition from manual human-oriented processes to machine-assisted automation. From claims processing and fraud detection to IT management, AI tools are increasing the speed and efficiency of many key tasks.

But for CIOs, these changes require a shift in workforce management. “Whether in operations or within IT departments, CIOs will find that an increasing proportion of their workforce will be machines,” according to the Gartner report. “This will require an adjustment to how they operate.”

CIOs will need to build frameworks for managing and governing their digital employees. In addition, they will have to address the impact of workforce changes on their organizational culture.

While insurers race to capitalize on AI, rapid implementation of new AI tools could lead to significant tech debt. The tasks required for continuously refining AI models or integrating AI tools with legacy systems, for example, could start to pile up quickly—and other maintenance tasks could be neglected. Meanwhile, the cost of maintaining AI systems will rise, and many teams will be forced to reallocate budgets from other initiatives.

To control technical debt and associated costs, insurance CIOs need to develop a holistic tech debt strategy that includes AI systems alongside traditional core systems. One of the keys to that strategy will be auditing current AI implementations and then prioritizing areas of technical debt to optimize resource allocation.

All of this new, AI-related work will become a central component of CIO job responsibilities. By 2027, more than a third of insurance CIOs will have emerging technologies adoption as a key performance indicator (KPI), according to Gartner. As the report states, “Insurers will increasingly recognize that business change will be driven by technological and data advancement, and not pure business ideation.” As IT teams shift their focus from maintenance of legacy systems to innovation and business growth, CIOs will be held accountable for leading the way with new technologies.

This focus on new technology adoption will require many CIOs to adjust processes and reassess their teams’ skills. To measure their progress, they may need to migrate from traditional KPI dashboards to an emerging technology dashboard—one that shows how IT is contributing to business transformation.

The strong focus on today’s emerging AI technologies does not mean abandoning yesterday’s solutions. In fact, Gartner analysts suggest that insurance CIOs should also reevaluate public cloud spending, which could rise unexpectedly as insurers become locked into particular cloud services with their core systems.

Still, succeeding with AI implementations will mean modifying traditional priorities and objectives. As the Gartner report states, “CIO decisions guided by conventional wisdom are insufficient.” To maximize the value of AI for competitive differentiation, insurance CIOs will have to apply differentiated thinking.

Ready to learn more?

To start building your strategy for deploying transformative AI technologies, read the Gartner report, “5 Unconventional Strategies Insurance CIOs Can Adopt.”

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