Declining Trust: Insurance Consumers Express Concerns Over AI Technology
Recent insights from the 2025 AI in Insurance Report by Insurity reveal a growing skepticism among insurance consumers regarding the use of artificial intelligence in the property and casualty (P&C) insurance sector. This shift in consumer sentiment underscores the urgent need for insurers to understand and address their customers’ concerns.
Declining Confidence in AI Usage
According to the report, the percentage of consumers supporting AI in the P&C insurance sector has dropped to only 20%, down from 29% in 2024. This decline is alarming, especially when considering that 44% of consumers now express reluctance to buy from insurers that publicly utilize AI, a rise from 42% last year.
Consumer Experiences with AI
Positive consumer experiences with AI have also seen a significant decrease, falling from 63% in 2024 to just 47% in 2025. However, understanding the purpose of AI, particularly in contexts like real-time severe weather monitoring and alerts, can increase acceptance among consumers.
The Importance of Transparency
Sylvester Mathis, Chief Revenue and Chief Insurance Officer at Insurity, emphasized that these shifts in sentiment are crucial for insurers to consider. He stated, “While AI has the potential to revolutionize the industry, its success depends on how it’s implemented and communicated.”
To foster trust, insurers must:
- Clearly communicate the benefits of AI to consumers.
- Demonstrate fairness in AI-driven processes.
- Share real-world success stories to build confidence.
Generational Attitudes Toward AI
The report also highlights a generational divide in attitudes toward AI. Support among different age groups has shifted significantly:
- Gen Z: Steady support at 25%.
- Millennials: Declined from 41% in 2024 to 26% in 2025.
- Gen X: Dropped from 34% to 20%.
- Baby Boomers: Decreased from 13% to 10%.
Opportunities for Insurers
Despite the challenges posed by declining trust in AI, there are opportunities for insurers to rebuild confidence. By focusing on:
- Transparent communication regarding AI’s role in claims processing,
- Real-time alerts for severe weather, and
- Thorough risk assessments,
insurers can demystify the technology and highlight its practical benefits.
Education is Key
It’s essential for insurers to educate consumers on the capabilities and limitations of AI. By sharing success stories and data-driven results, insurers can reinforce the value of AI. Focusing on transparency and real-world advantages will help bridge the gap in consumer sentiment and enhance policyholder trust.
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