Nearly Half of Consumers Feel Comfortable with Insurers Using AI to Monitor Severe Weather Risks, but Concerns About Premiums Remain High, Insurity Survey Finds

January 21, 2025 at 10:15 AM EST

The Insurity 2025 AI in Insurance Report highlights consumer sentiment on AI adoption in the P&C insurance industry, uncovering crucial insights for insurers navigating the future of risk management

Insurity, a leading provider of cloud-based solutions for insurance carriers, brokers, and MGAs, today released its 2025 AI in Insurance Report, highlighting key consumer opinions on the use of artificial intelligence (AI) in P&C insurance, specifically how it pertains to severe weather.

The report revealed that while 45% of consumers state feeling comfortable with their insurer using AI to monitor and provide real-time alerts about potential weather-related risks, 42% express concern about how the accuracy of those predictions could influence their premiums or coverage. These findings highlight a significant challenge for insurers as they work to balance the introduction of AI-powered preventative services with transparent communication about their reliability and potential financial impact on policyholders.

Despite these concerns, there are clear opportunities for insurers to build trust. While 26% of consumers say they are more likely to trust AI-generated early warnings compared to traditional forecasts, only 20% consider it important that their insurer use AI to predict and mitigate severe weather risks. To foster confidence, insurers must demonstrate the practical benefits of AI-based alerts and predictions while being transparent about their accuracy and limitations.

"Severe weather events are increasing in frequency and severity, and consumers are looking for faster, more proactive solutions from their insurers," said Chris Lafond, Chief Executive Officer at Insurity. "Consumers want the benefits of AI-driven weather insights, but they’re understandably cautious about how these predictions may affect their policies. For insurers, the year ahead presents an opportunity to build trust by prioritizing transparency and accuracy while demonstrating how AI can proactively protect customers without introducing unnecessary costs."

This openness to AI for severe weather management presents a critical opportunity for insurers to elevate the customer experience. Real-time alerts and proactive monitoring can strengthen customer relationships and potentially reduce claims costs by enabling early action. However, given the high stakes involved in coverage decisions, insurers must ensure their AI-driven insights are not only accurate but also easy for policyholders to understand and trust.

“The 2025 AI in Insurance Report underscores that while AI adoption continues to grow, consumers need more education and transparency to fully trust these tools,” said Lafond. “As the insurance industry navigates this landscape, the insurers that address these concerns head-on will be better positioned to foster stronger policyholder relationships and remain competitive.”

This survey was conducted online in January 2025, and more than 1,000 adult participants were randomly selected across the United States to ensure a representative sample. Respondents were asked a series of 19 questions, ranging from multiple-choice to scale-based, to gauge their opinions on AI in P&C insurance. Data analysis was performed to identify key patterns and insights.

To learn more about Insurity’s 2025 AI in Insurance Report, please get in touch with Elizabeth.Hutchinson@insurity.com.

About Insurity

Insurity is a leading provider of cloud-based software for insurance carriers, brokers, and MGAs. Insurity is trusted by 22 of the top 25 P&C carriers and 7 of the top 10 MGAs in the US and has over 400 cloud-based deployments. Through its best-in-class digital platform, unrivaled industry experience, and the industry’s most robust analytics offerings, Insurity is uniquely positioned to deliver exceptional value, empowering customers to focus on their core businesses, optimize their operations, and provide superior policyholder experiences. Insurity is a portfolio company of GI Partners and TA Associates. For more information, visit www.insurity.com.