Insurance Industry Trends: What to Expect for 2025
From economic pressures to changing regulations, insurance professionals face some tough changes in 2025. However, there is a silver lining. With each shift there is an opportunity to rise to the top and gain more market share.
Wondering what the latest insurance sector trends will mean for your business this year? Keep reading for three of the most important ones—and how to navigate them.
1. Digital Client Experiences
Insurance is woven into the fabric of our society, whether clients think of it this way — or not. From auto coverage to cyber insurance, it’s a necessary part of daily life and doing business. However, amid the economic uncertainties and rising rates of 2024, the sector slipped into the forefront of more customers' minds.
What does this mean for your business in 2025?
Customer expectations for the industry are changing fast. People want exceptional service and digital experiences and they’ll quickly leave carriers who don’t provide them. In fact, of consumers surveyed are now willing to pay a premium if it means the company will provide outstanding support—a sentiment that applies to many insurance shoppers even in a difficult climate.
Most importantly, they’re looking for quick and thorough online support. They want first-contact resolution, seamless digital connections and brands that deliver on their promises. But nearly half of customers have been unable to satisfactorily resolve insurance issues and they’re looking for a change.
To meet these expectations in 2025, insurance companies must create truly outstanding online communication channels. And not just by adding chatbots or automated return calls. Digitization of claims and policy documentation is a crucial part of the process, as are interactive client portals and dedicated collaboration spaces.
2. Robust Data Protection
Insurance companies handle a significant amount of sensitive customer data—personally identifiable information (PII), financial records, health details… and the list goes on. It all makes companies a prime target for cyberattacks. What’s more, the average cost of a data breach reached $4.88 million in 2024—a 10% increase over last year and the highest total ever.
At the same time, cyber insurance claims—requests from businesses recovering from cyber attacks—increased significantly in 2024. A surge of ransomware attacks and privacy violations led to a big spike in claims of $1 million or more.
Robust data protection can’t wait. Insurance companies will need to fast-track cyber risk management plans in 2025, when the future of cybersecurity hinges on proactive defense strategies. Now is the time to assess security gaps and implement measures to secure customers and claim data across every document shared and sent.
Continued learning: Data security checklist for insurance
3. Accelerated AI Adoption
Numerous industries are being impacted by artificial intelligence (AI) and insurance is no exception. In the words of McKinsey & Company researchers: “The industry is on the verge of a seismic, tech-driven shift.”
Industry executives are embracing AI at an accelerated pace. In one survey, 77% of insurance professionals said they were at some stage of AI adoption—a 16% jump from just one year prior. Companies use it to automate routine claims processing, respond to customer inquiries, identify potential underwriting risks, personalize products and even reinvent customer service.
As insurance agencies look to improve business processes with AI in 2025, the right tools will be key. Successful companies know to automate workflows, summarize documents and improve customer satisfaction.
Looking ahead
Digital client experiences, robust data protection and proper applications of AI all stand to impact the insurance sector in 2025. As the industry continues to evolve at a rapid pace, each of these areas will impact companies’ ability to stand out in an increasingly competitive landscape.
Wondering if your business is on the right track? Take a look at seven insurance workflows to automate for 2025.