As the insurance industry enters a transformative 2025, CIOs face growing pressure to shift from traditional IT leadership to collaborative models that deliver real business results. Ushur is actively investigating this shift.
According to Gartner’s “CIO Agenda for Insurance” report, insurance CIOs who adopt a co-leadership approach with business stakeholders—termed “Digital Vanguards”—are up to twice as likely to meet or exceed their performance targets. However, only 16% currently follow this model, trailing the global average of 17%.
A pivotal focus for CIOs this year will be deploying AI tools, particularly Generative AI (GenAI), to drive business value. Effective implementation will require close collaboration between IT, business, compliance, and risk teams—striking a balance between innovation and the industry’s regulatory demands.
Shifting tech priorities and investment trends
Gartner’s data reveals that 89% of insurance CIOs plan to boost GenAI funding in 2025, with an average increase of 38.1%. Meanwhile, 83% also intend to increase investment in traditional AI technologies. Despite this, 68% cite regulatory compliance as the top expected outcome of digital initiatives—followed by customer experience at 64%.
Security and risk management remain the top focus for 68% of CIOs, while innovation and collaborative leadership rank near the bottom at just 19%. This imbalance reflects the industry’s cautious stance but may limit the full potential of emerging technologies like GenAI.
Focus areas and digital execution gaps
Over the next 12 months, insurance CIOs are prioritising cybersecurity, IT strategy execution, and operating model transformation. Business alignment remains a challenge, with innovation initiatives and cross-functional leadership receiving minimal attention. This gap represents a critical opportunity for those willing to embrace a more integrated model.
Technology adoption and AI momentum
Half of insurers have already deployed AI, with an additional 28% planning to do so within a year. GenAI adoption is expected to grow rapidly, with 30% having deployed it and 38% planning deployments in 2025. Low-code/no-code tools are also gaining traction, enabling faster digital experimentation.
Investment surges are being seen in GenAI (89%), cloud platforms (86%), cybersecurity (86%), and business intelligence (80%). However, funding is declining in areas such as human augmentation (-4%) and next-gen computing (-6.5%), suggesting a more focused investment strategy aligned to practical returns.
Smarter procurement strategies emerging
When selecting technology partners, CIOs are drawing clear lines between commodity and differentiating technologies. For the former, total cost of ownership (TCO) ranks highest. For the latter, innovation, product roadmap, and TCO are key. This shows a growing maturity in procurement, aligning spend with strategic priorities.
The AI imperative and organisational readiness
While 60% of CIOs aim to help business teams understand AI opportunities, fewer (45%) are working to upskill business users. Moreover, only 39% are focused on mitigating workforce risks posed by AI adoption—a notable oversight.
This highlights a growing need for change management and education across insurance organisations to enable responsible and sustainable AI deployment.
Digital Vanguard: A proven model for success
Gartner’s findings indicate that Digital Vanguard CIOs—those who share decision-making and co-own digital initiatives—see a 71% success rate, compared to just 48% for traditional CIOs. These leaders create enabling platforms, instil architectural discipline, and foster business-led innovation.
They also invest in business technologists—staff in non-IT roles who are empowered to lead digital change. In practice, this means creating fusion teams that bring together IT, data science, business, and compliance professionals to deliver AI-powered solutions tailored to insurance use cases.
How to build a winning strategy for 2025
To thrive this year, CIOs should realign their IT models to support business innovation while maintaining compliance. Initial steps include forming fusion teams, launching low-risk GenAI pilots, and upskilling both business and IT units.
Implementation should follow a phased plan: assess collaboration gaps in the first 90 days, build governance in months 3–6, and scale successful pilots through the year. Platform investments and clear success metrics will be essential to drive both operational and strategic results.
Collaboration is no longer optional
With 89% of insurers set to increase GenAI investment, the path forward hinges on a collaborative approach. CIOs must step beyond their traditional boundaries and co-create solutions with business leaders, enabling transformation while navigating complex regulatory landscapes.
The Digital Vanguard model offers a proven path to greater success, and the sooner insurance CIOs adopt it, the more competitive advantage they can realise in a rapidly evolving industry.
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