Across industries, rising prices, rapid technology advancements, and growing customer expectations have forced many companies to reexamine old assumptions and devise new strategies. Insurance is no exception. There are several insurance trends for 2025 that leaders must act on.
In an industry that’s saturated—new digital-focused competitors fill the market— industry incumbents must stay flexible so that they can provide products and services that will pave the way to competitive differentiation.
The growing number of climate-related extreme weather events make the need to change even more pressing for the insurance industry.
As risks become more unpredictable and consumers are more empowered, insurers can “no longer evaluate risks through the rear-view mirror,” Deloitte said it its 2025 industry outlook.
“By modernizing and streamlining infrastructure, operations, and business models, insurers can develop a more forward-looking approach to risk modeling, assessment, analysis, and mitigation,” they wrote.
From preparing for an aging population to insuring the transition to clean energy, here are the insurance trends to watch:
This demographics trend presents both a challenge and opportunity for the insurance sector. Insurers must develop solutions to meet the increasing global demand for products targeting the “silver segment” by increasing their life and health insurance offerings. Older customers also can benefit from tailored advisory services that focus on their unique financial planning needs.
Retirees often rely on a patchwork of government programs (such as Social Security in the United States), pensions, investments, and personal savings. Insurance and financial companies can step in with retirement planning and investment management to help bridge the gap that senior citizens can face as they try to maintain their standard of living.
Developing new products that are personalized for older customers now will help insurance companies get ahead of the demographic shift that’s under way.
Insurers need to reskill existing employees and hire for the tech-heavy skills they will need to create the workforce of the future.
With AI automating so many tasks and the simultaneous transitions toward green and digital business models, that figure is likely much higher.
Talent management has become a priority as the insurance industry continues to change. By developing an agile, sustainable workforce, companies will have both the technical and soft skills to bring insurance into the modern era. They’ll know how to provide the kind of experiences customers now expect.
Technology is the backbone of future-proofing the workforce in insurance, helping companies to:
In particular, AI is now at the center of innovation and workforce transformation. Companies will need to communicate its value to get employees on board, and they also must be transparent about data usage and storage policies.
Pressured by new digital-focused competitors, insurance companies need to develop new revenue streams beyond traditional business models. The convergence of insurance with other industries is helping some firms reach that goal.
Barriers between industries are coming down and customer-focused ecosystems are becoming much more powerful, a trend that will continue growing.
In the insurance industry, this collaborative model will create interconnected ecosystems, providing integrated solutions and seamless interactions across industries. To make the most of this opportunity, insurers need to focus on defining their ecosystem vision (for example, targeting key leaders in mobility, housing, health, or B2B), integrating offerings beyond core insurance, and nurturing those partnerships.
For example, an insurance company can embed coverage into an an auto company’s car rental process to automatically offer individual pricing to customers.
Companies that follow this 2025 insurance trend will create business value across their ecosystem by combining IT resources, cloud technologies, data, and AI tools.
With the rise of aggregators and comparison websites, customers require transparent insurance pricing and contract information. Making prices and terms clear, accessible, and consistent across channels goes a long way in building trust with customers.
In Europe, the stakes are especially high when it comes to transparency. Insurance companies in the region will have to be careful to abide by the Retail Investment Strategy regulation set to take effect in 2027.
With the goal of protecting investors and encouraging participation and efficiency, it will require businesses with retail investing practices to provide transparent information about their investment products. The regulation may change savings distribution and insurance preferences in Europe.
As a result, insurers will need to develop new processes and potentially update their product mix to make their offerings match what consumers need, while staying within the guardrails of the new regulation.
The transition away from fossil fuels to renewable energy is a when, not an if. What energy companies do now to differentiate themselves and set a foundation for the future will separate the leaders from the laggards.
Businesses are transitioning away from fossil fuels to renewable energy to meet customer demand and regulations around environmental, social, and governance practices.
The International Energy Agency estimates that renewables will make up 50% of energy consumption by 2030.
Insurance companies will need to work on their eco-friendly practices to meet these increasing demands. It’s an exercise in future-proofing, as climate challenges will continue to evolve. Creating internal climate capabilities and building green portfolios will make it possible for insurers to stay top of mind with forward-looking clients.
Adding generative AI to the mix has already helped insurance companies with policy issuance and claims processing, but insurers have just scratched the surface with other applications like product development and customer support operations.
Using AI and other digital technologies within insurance has the potential to save valuable time previously spent on research, processing, repetitive tasks, quotes, and more.
Data is essential for effective AI implementation. By putting systems in place to collect and act on data quickly, insurers can implement data-driven decision making across the value chain. AI and cloud-first strategies can help:
Efficiency is especially important for insurers. An example that stands out is Co-operators, a Canadian insurance company. They worked with SAP to automate manual work around advisor compensation and reduced it by 50% so they could focus on selling insurance.
There are many other use cases for data-driven solutions. Another example is how European insurance companies used advanced analytics to increase operating profits by up to 25% in 2022. With the way AI and data infused products are trending, this is likely to increase over time.
With the opportunities introduced by AI and the constantly changing needs of insurance customers, the 2025 insurance trends underscore the need for agility built on a strong data core.
When a company has a transformation strategy with the right technologies in place, they’re able to collect, store, and act on data in a way that keeps up with market shifts and the needs of their customers, staff, and partners. Insurers that tap into the power of data, analytics, and the cloud put themselves in a position to drive sustainable growth.
