WHAT’S IN STORE FOR THE INSURANCE INDUSTRY FOR 2025? 

After a year of widespread transformation in the Insurance sector all indications are that 2025 is set to bring even greater change. These changes have been driven by technological development, climate extremes, and shifting market demands. 

UK MARKET 

In the UK, there is overwhelming concern from the industry surrounding a talent shortage as fewer young people are entering the industry and thus, creating major concerns about the industry facing a future workforce gap. At the same time the overall transformation of the industry and M&A activity will see revolving board seats as boards position themselves for growth.

AI will continue to be at the forefront of the transformation agenda to reshape the industry. However, the modernisation of tech infrastructure to support AI-driven tools will not happen overnight and will require firms to make wise investment choices.

Organisations with a process to assess the security of AI tools before deployment

 

• Female, 44, 21%
• Male, 166, 79%

CASE-STUDY: ALLIANZ SCALING AI TO TRANSFORM INSURANCE 

• AI has over 400 use cases, with on example being EKA tool which accelerates finding and extracting information. The tool helps identify relevant documents for claims and reducing communication lead time with customers.
• Allianz has been able to scale this from its life insurance business in Germany, across to Germanys Property and Casualty services, as well as support functions like HR in India.
• They benefit from the unique advantage of both Allianz Services and Allianz Technology, who have over 20,000 experts in IT, operations, AI and new technology. This has helped them to industrialise and scale their AI capabilities.
• The agent was developed from concept to rollout in just over a year. 

US MARKET 

Insurance M&A activity in 2025 is expected to increase due to favourable economic conditions, with a more accommodating regulatory environment, and increased risk appetite. Whereas VC investment in Insurtech’s will be buoyed by normalising interest rates. 

US INSURANCE M&A DEAL VALUE AND VOLUME 

The Cyber Security landscape will continue to evolve at pace driven by continuing innovation of threat actors, regulatory pressures and emerging technologies. Premiums will rise as policies see reduced coverage and increased requirements around cybersecurity controls and response planning. 

The pace of transformation in the Insurance industry shows no signs of slowing. From talent shortages and M&A activity to AI-driven innovation and evolving cybersecurity challenges, firms must navigate a complex and shifting landscape. Success will depend on strategic investment in technology, proactive talent acquisition and a keen understanding of market dynamics. With change comes opportunity, and those who adapt effectively will be best positioned for growth in the year ahead.