The 2025 Insurance CIO Agenda

Executive Summary

As insurance industry CIOs navigate 2025, Gartner's comprehensive "CIO Agenda for Insurance" report leaves a critical takeaway: those who collaborate effectively with business units achieve dramatically better outcomes. The data shows "Digital Vanguard" CIOs, CIOs who co-lead digital initiatives with business counterparts, are 1.5 to 2 times more likely to meet or exceed targets than their traditional counterparts. Yet only 16% of insurance CIOs currently operate in this model, below the global average of 17%.

This year will be decisive for getting AI solutions, particularly Generative AI, into the hands of insurance business users. Success will depend on collaborative partnerships that balance innovation with the industry's unique risk management and compliance requirements.

Key Findings: The State of Insurance IT in 2025

Shifting Technology Priorities

The survey data reveals several crucial trends reshaping insurance IT:

1. AI Investment Acceleration: 89% of respondents plan to increase funding for Generative AI in 2025, with an average funding increase of 38.1%. Additionally, 83% will increase investment in traditional AI with a 27.4% average increase.
2. Risk-Focused Digital Outcomes: 68% of insurance CIOs report that compliance with laws and regulations is their top expected outcome from digital technology investments, followed by improving customer experience (64%).
3. Traditional Mindsets Persist: Despite digital transformation opportunities, CIOs are maintaining traditional roles, with limited focus on sharing technology leadership responsibilities with other C-suite executives.
4. Optimization Over Innovation: Many CIOs are prioritizing optimization of existing systems rather than driving innovation, with security and risk management (68%) topping the CIO focus areas.

This prioritization reflects the industry's conservative nature but may inhibit transformative opportunities offered by technologies like GenAI. The data suggests a fundamental tension between optimization and innovation that successful CIOs must navigate.

CIO Focus Areas for Next 12 Months

Insurance CIOs are concentrating their attention on:

1. Managing cybersecurity and technology risks (68%)
2. Creating and executing IT strategy (61%)
3. Transforming the IT function's operating model (54%)
4. Demonstrating business value of IT (53%)
5. Modernizing enterprise applications (51%)

Notably, innovation-related activities and sharing technology leadership with other CxOs rank near the bottom, at 19% each. This gap presents both a challenge and an opportunity—insurance organizations that can overcome the innovation-optimization divide will likely outperform competitors.

Technology Adoption and Investment Plans

The survey identifies clear priorities in deployment plans:

1. AI Technologies Lead: 50% of insurance companies have already deployed AI, with another 28% planning deployment within the next 12 months.
2. Low-Code/No-Code Platforms: 50% have already deployed these platforms, with an additional 16% planning deployment within 12 months.
3. Generative AI: 30% have already deployed GenAI solutions, with another 38% planning deployment in the next 12 months, making it the technology with the highest projected adoption rate for 2025.
4. Investment Priorities: Beyond GenAI (89% increasing investment), other top investment increases include cloud platforms (86%), cybersecurity (86%), and business intelligence/data analytics (80%).
5. Declining Technologies: Areas seeing decreased funding include human augmentation (-4%), next-generation compute technology (-6.5%), and HCM systems (-5.3%).

The surge in GenAI investment suggests a recognition of its potential to transform core insurance processes from underwriting to claims management. Forward-thinking insurance organizations are looking beyond simple efficiency gains to fundamental business model transformation.

Vendor Selection Criteria

The survey highlights distinct criteria for different technology types:

1. For Commodity Technologies: Total Cost of Ownership (TCO) dominates at 82%, followed by product roadmap (52%) and ease of user experience (46%).
2. For Differential Technologies: Innovation (66%), product roadmap (61%), and TCO (55%) top the list, showing a greater emphasis on strategic value.

This distinction reveals a growing sophistication in insurance CIOs' technology procurement approach. Rather than applying one-size-fits-all selection criteria, leading CIOs are developing balanced frameworks that weigh cost considerations against innovation potential based on the strategic importance of each technology area.

The AI Imperative for Insurance

The data clearly shows 2025 is the year of AI in insurance, but success requires a strategic partnership between IT and business units:

1. Educational Role: 60% of respondents rate "helping business areas understand AI opportunities and risks" as highly important, yet there's less focus (45%) on strengthening business areas' AI skills.
2. Implementation Focus: 58% rate "helping implement AI solutions for business areas" as highly important, showing a service-oriented approach.
3. Risk Management Gap: Only 39% are focusing on managing workforce risks and anxieties generated by AI, a potential oversight given the human impact of AI implementation.

This emphasis on education over implementation suggests many insurance CIOs recognize the challenges of AI adoption extend beyond technology to include organizational change management. However, the low priority placed on workforce risk management indicates a potential blind spot that could hamper adoption efforts.

For insurance specifically, the AI imperative intersects with strict regulatory requirements and complex risk management considerations. Successful implementations require navigating federal and state regulations while delivering meaningful business outcomes. This balance demands collaborative approaches between IT, business, compliance, and risk management teams.

The Digital Vanguard Opportunity

The most compelling finding is the stark contrast in success rates between collaborative and traditional CIO models:

• Digital Vanguard CIOs and CxOs achieve a 71% success rate in meeting or exceeding targets
• Non-collaborative CIOs and CxOs achieve only a 48% success rate

What defines a Digital Vanguard? These CIOs share several distinguishing characteristics:

1. They actively co-own digital initiatives with business leaders rather than simply supporting them
2. They distribute technology decision rights across the organization while maintaining appropriate guardrails
3. They prioritize business outcomes over technology implementation
4. They invest in educating business partners on technology principles while building technology fluency in IT staff about insurance business domains

To grow the Digital Vanguard approach, the report recommends four key strategies:

1. Provide enabling platforms: Create easy-to-use, compelling platforms that enable business units to develop their own solutions with appropriate guardrails
2. Instill architectural awareness: Provide enterprise-wide guidance on architecture, TCO, and cybersecurity to business leaders, translating complex technical concepts into business implications
3. Co-create innovation: Make it easier to incubate and scale business-led initiatives, particularly around AI, by establishing joint innovation labs and dedicated funding mechanisms
4. Develop business technologists: Improve business areas' ability to lead digital initiatives by investing in training programs, career paths, and recognition systems for business team members who develop technical capabilities

In successful insurance organizations, we see these principles applied through dedicated fusion teams that combine business, IT, data science, and compliance expertise to rapidly develop and deploy AI-powered solutions that address specific insurance use cases.

Building for Success in 2025

To position for success in this critical year, insurance CIOs should focus on:

1. Reorienting the IT operating model: Support business-led technology initiatives while maintaining appropriate risk management controls by creating dedicated enablement teams that can provide rapid response to business needs
2. Create a practical GenAI strategy: Balance innovation with compliance considerations unique to the insurance industry by focusing initial deployments on high-value, low-risk use cases like knowledge management and agent assistance
3. Developing fusion teams: Combine IT and business expertise in collaborative teams with clearly defined authority, accountability, and success metrics
4. Invest in platform business models: Enable secure experimentation with emerging technologies through properly governed sandbox environments and reusable technology components
5. Implement comprehensive upskilling: Develop both IT and business teams to understand AI capabilities, limitations, and governance requirements through targeted training programs

Implementation priorities should follow a logical sequence:

• First 90 days: Assess current state of IT-business collaboration and identify 2-3 high-potential AI use cases for collaborative pilots
• Months 3-6: Establish governance frameworks and platforms to enable business-led innovation
• Months 6-12: Scale successful pilots while developing metrics to track both technology implementation and business outcomes

Conclusion: The Collaboration Imperative

The 2025 insurance technology landscape demands a new approach to CIO leadership. While traditional responsibilities around cybersecurity and risk management remain crucial, the most successful CIOs will be those who actively partner with business leaders to co-create digital solutions.

With 89% of insurance companies increasing GenAI investments and 38% planning to deploy within the year, the time for siloed approaches has passed. CIOs who embrace the Digital Vanguard model—co-owning digital initiatives with business counterparts—will not only see significantly higher success rates but will position their organizations to harness the transformative potential of AI while navigating the complex regulatory landscape of insurance.

The question for insurance CIOs is no longer whether to collaborate, but how quickly and effectively they can establish the platforms, skills, and governance models to enable business-led technology innovation while maintaining appropriate controls. Those who build bridges between IT capabilities and business needs will define the next generation of insurance industry leaders.

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This analysis is based on Ushur's deep expertise in enabling insurance digital transformation through intelligent automation. As pioneers in collaborative AI implementation for insurance, we've observed these trends across our client base and developed methodologies that enable Digital Vanguard approaches.

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