Consumer confidence in artificial intelligence (AI) within the property and casualty (P&C) insurance sector is on the decline, according to Insurity’s 2025 AI in Insurance Report.

The findings signal a growing skepticism among policyholders, highlighting a pressing need for insurers to enhance transparency, education, and communication around AI-driven processes.

The report reveals a significant drop in consumer support for AI in P&C insurance, with only 20% of Americans viewing it positively—down from 29% in 2024. Additionally, 44% of consumers now say they are less likely to purchase a policy from an insurer that publicly adopts AI, up from 42% last year. Positive experiences with AI have also declined, with just 47% of respondents reporting favorable interactions in 2025, compared to 63% in 2024.

Despite these concerns, the report indicates that consumers are more accepting of AI when its purpose is clearly defined—such as in real-time severe weather monitoring and alerts. This suggests that insurers can rebuild trust by demonstrating AI’s tangible benefits and ensuring greater transparency in its applications.

The generational breakdown highlights further shifts in sentiment:

• Gen Z attitudes toward AI remained stable at 25% positive sentiment.
• Millennials experienced the sharpest decline, dropping from 41% in 2024 to 26% in 2025.
• Gen X positivity fell from 34% to 20%, while Baby Boomers declined from 13% to 10%.

The report underscores the need for insurers to proactively address consumer concerns about AI’s role in underwriting, claims processing, and risk assessment. With skepticism rising, the industry must take decisive action to reinforce trust and demonstrate AI’s ability to enhancenot replace – human decision – making in insurance.

“These shifts in consumer sentiment serve as a critical reminder for insurers – while AI has the potential to revolutionise 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.

The 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.