Insurity Survey Reveals Declining Consumer Confidence in AI for P&C Insurance, Signaling a Need for Action from Insurers

February 20, 2025 at 10:18 AM EST

Insurity’s 2025 AI in Insurance Report uncovers shifting consumer attitudes toward AI in P&C insurance, revealing key opportunities for insurers to address skepticism

Insurity, a leading provider of cloud-based solutions for insurance carriers, brokers, and MGAs, today released more findings from its 2025 AI in Insurance Report, highlighting a significant shift in consumer trust and sentiment toward the use of artificial intelligence (AI) in P&C insurance compared to the insights shared in last year’s report. The findings reveal declining confidence in AI across key areas, emphasizing the critical need for insurers to address these concerns through transparency, education, and tangible benefits.

The report shows that support for AI usage among consumers has dropped, with only 20% of Americans saying it’s a good idea for P&C insurers to leverage AI, down from 29% in 2024. At the same time, skepticism about AI-driven processes has grown, with 44% of consumers less likely to purchase a policy from an insurer that publicly uses AI, compared to 42% last year. Positive experiences with AI have also sharply declined, dropping from 63% of consumers reporting positive interactions in 2024 to just 47% in 2025. However, the report also shows that consumers are more comfortable with AI when they clearly understand its purpose, such as its use in real-time severe weather monitoring and alerts.

When examining the generational data, the report highlights that positive sentiment toward AI has dropped across most generations, except Gen Z, which held steady at 25%. Millennials saw the most notable decline, with positive sentiment falling from 41% in 2024 to 26% in 2025. Similarly, Gen X dropped from 34% to 20%, and Baby Boomers from 13% to 10%. These generational shifts reflect wider concerns regarding AI’s transparency, reliability, and perceived value, all of which need to be addressed for insurers to regain confidence and trust.

“These shifts in consumer sentiment serve as a critical reminder for insurers – while AI has the potential to revolutionize the industry, its success depends on how it’s implemented and communicated,” said Sylvester Mathis, Chief Revenue and Chief Insurance Officer at Insurity. “Consumers want to know how AI benefits them directly and need reassurance that it’s being used responsibly and transparently. Insurers who focus on education, demonstrate fairness in AI-driven processes, and showcase real-world success stories can turn skepticism into confidence and drive meaningful engagement.”

Despite the challenges, the findings present actionable opportunities for insurers to build trust and bridge the gap in consumer sentiment. Clear communication about how AI supports policyholders through faster claims processing, real-time severe weather alerts, or accurate risk assessments can help demystify its role and benefits. Educating consumers on AI’s capabilities and limitations sets realistic expectations while sharing success stories and data-driven results highlights the tangible value AI delivers. These steps can address skepticism and position AI as a tool that enhances policyholder experiences and builds loyalty.

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.