Insurity, a provider of cloud-based solutions for insurance carriers, brokers and MGAs, has released its 2025 AI in Insurance Report, which examines consumer perspectives on artificial intelligence in property and casualty insurance, particularly in severe weather.
The report found that 45% of consumers are comfortable with insurers using AI to monitor and issue real-time alerts about potential weather-related risks. However, 42% expressed concern about how the accuracy of these predictions might affect their premiums or coverage.
The results highlight a key challenge for insurers as they introduce AI-powered preventative services while ensuring transparent communication about their reliability and financial impact.
Despite these concerns, the report also reveals opportunities for insurers to build trust. While 26% of consumers are more likely to trust AI-generated early warnings compared to traditional weather forecasts, only 20% view it as important for their insurer to use AI to predict and manage severe weather risks.
Insurers will need to demonstrate the practical benefits of AI-based alerts and predictions while being clear about the accuracy and limitations of these tools to foster trust.
The survey, conducted in January 2025, involved over 1,000 adult participants across the United States. Respondents answered 19 questions to provide insights into consumer opinions on AI in P&C insurance. Data analysis was performed to identify key trends and findings.
“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 of 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,” Lafond added.
The report suggests that there is significant potential for insurers to enhance the customer experience by using AI to provide real-time alerts and proactive monitoring. Such tools could strengthen customer relationships and potentially lower claims costs by enabling early action.
However, given the importance of coverage decisions, insurers must ensure AI-driven insights are accurate and understandable for policyholders.
"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," Lafond stated. "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."
