Swiss Re: AI boom reshapes risk, but leaves insurers exposed

Artificial intelligence (AI) rapidly reshaped the global risk landscape during 2025, creating significant new insurance opportunities alongside growing macroeconomic and underwriting vulnerabilities, according to analysis from The Swiss Re Institute.

The report found that AI-related capital expenditure accounted for as much as half of US GDP growth in the first half of 2025, even though its direct contribution to measured output remained limited.

Instead, the impact was concentrated in asset prices, corporate profits and balance sheets, leaving the US economy increasingly exposed to shifts in AI-related sentiment.

Equity ownership represented roughly one third of US household net worth, amplifying the economy’s reliance on continued optimism around AI-linked growth.

Swiss Re Institute estimated that a sustained 20% fall in valuation multiples of heavily AI-driven equities could wipe out at least $10trn of household net worth and reduce US aggregate demand by one to two percentage points over time.

The analysis suggested this configuration created a distinct economic vulnerability, with AI investment and wealth-supported spending carrying a disproportionate share of growth momentum.

At the same time, the surge in AI investment has reshaped insurance risk pools and demand.

Hyperscale data centres, high-performance computing facilities and expanded power and energy infrastructure created sizeable new insurable exposures across engineering and construction, commercial property, liability and trade credit insurance.

“The AI boom has been sprint-like in its jump from billions to trillions,” said Jerome Haegeli, Swiss Re’s group chief economist and head of The Swiss Re Institute.

“It is now creating fast-expanding new insurable asset classes for the insurance industry, from trillions of dollars being invested in data centres, to millions of kilometres of new power lines expected over the coming years,” Haegeli said.

In the near term, the report said insurers could expect increased premium volumes from AI-related asset classes that had historically been lightly insured or sat outside traditional P&C portfolios.

Over the medium to long term, however, AI-driven disruption was expected to reallocate rather than simply expand insurance demand, as some industries saw reduced asset bases while new lines of business emerged.

AI adoption also transformed insurers’ own operations.

Based on an analysis of 187 reported use cases, Swiss Re Institute found that property and casualty insurers led AI deployment, particularly in underwriting and claims, while life and health insurers reported greater use in operations and distribution.

Despite rapid uptake, fewer than 5% of insurers analysed had disclosed any measurable financial impact from AI adoption during the period reviewed.

Alongside opportunity, the report warned of new and complex risk exposures.

AI increased cyber threats and introduced risks linked to algorithmic error, data bias, intellectual property disputes and systemic concentration tied to reliance on a small number of cloud and AI service providers.

These exposures frequently cut across traditional policy boundaries, creating complex claims scenarios and the potential for accumulation across cyber, liability and business interruption lines.

Swiss Re Institute concluded that efficiency gains from AI did not automatically translate into sustained underwriting profitability.

“Over time, we saw AI-driven disruption reallocating rather than adding demand for insurance, likely requiring active portfolio and underwriting adjustment,” the report said.

Haegeli added: “We view the next stage more like a marathon of steady investments after the sprint. Rather than simply grow, the demand uplift may begin to reallocate as AI disrupts industries and compresses traditional business models.”