Emerging Trends in AI and Insurtech
To identify the future direction of insurtech by 2025, Digital Insurance consulted with industry experts, each offering valuable insights that highlight both exciting opportunities and important challenges facing the sector.
A strong consensus emerged that generative AI will see deeper integration across various insurance functions, significantly impacting underwriting, claims processing, and customer service.
As the Internet of Things (IoT) generates vast amounts of data, insurers will find innovative methods for more precise risk assessments and loss prevention strategies.
However, concerns regarding regulatory compliance, data integrity, and the practical application of these technologies remain critical hurdles to overcome.
Here’s a roundup of their key insights:
- Megan Wood, Genius Avenue President: A transformative change is on the horizon for user interfaces (UI) and user experiences (UX) in insurtech.
Even though underwriting and claims processes have seen improvements, the overall experience for policyholders still pales in comparison to other industries.
The belief that younger generations will tolerate mediocre user experiences is mistaken.
No organization has yet fully harnessed advanced UI/UX design, conversational AI, or digital payment systems to optimize the customer journey.
By simplifying mobile interactions for enrollment and ongoing engagement, companies can substantially boost adoption and retention rates.
- Rashid Galadanci, CEO and Co-founder of Driver Technologies: The application of connected car data in insurance pricing is still in its infancy.
Many insurers currently lack enough data from connected vehicles to enhance their pricing models effectively.
However, as users share data through popular third-party applications, the stage is set for usage-based insurance (UBI) models specific to connected vehicles.
Notably, there’s a shift away from relying on automaker-branded apps, as many corporate legal departments prefer avoiding direct management of user data, signaling an increased dependency on third-party solutions.
- Leandro Dallemule, General Manager, Planck/Applied Systems: Looking toward 2025, the emergence of agentic AI will become more common, with such technology taking on specific tasks rather than merely providing suggestions.
This evolution will likely result in greater automation across underwriting and other insurance functions, allowing AI to execute processes, manage choices, and tackle related logistical challenges.
Customer service is set to benefit greatly, with AI handling routine inquiries and providing timely solutions, which will undoubtedly enhance customer satisfaction.
- Darcy Rittinger, Cover Genius Chief Risk Officer: While incorporating AI into insurance processes offers tremendous potential, it is imperative for companies to proceed with caution.
When offering advice or information about insurance products to consumers, understanding customer consent and data ownership is vital during the AI integration phase.
By carefully weighing the benefits and risks of AI, insurtech companies can harness this groundbreaking technology while minimizing possible pitfalls.
- Bill Martin, President & CEO of Plymouth Rock Assurance: As we look to 2025, there is an expectation that AI will help the broader public to appreciate its capability to reduce bias and errors made by carriers and underwriters.
Through advanced technologies, insurers could make more objective underwriting decisions, potentially saving countless lives and preventing injuries in various safety contexts.
- Rachel Switchenko, Plymouth Rock Assurance VP of Customer Solutions: The insurtech sector is only beginning to explore the full potential of AI.
As the industry collectively navigates upcoming developments, organizations that use AI to tackle significant challenges—rather than just enhancing operational efficiencies—will distinguish themselves by delivering greater value and effecting meaningful changes.
- Ian Drysdale, CEO of One Inc: The global market for AI in insurance is projected to increase by over 55% between 2022 and 2032, potentially reaching $79.86 billion.
This growth will enhance underwriting and claims processes, allowing for quicker analyses that streamline workflows and assessment procedures while also expediting digital payments.
- Ken Tolson, CEO of Turvi: In the competitive landscape of the property and casualty (P&C) insurance sector, generative AI will emerge as a crucial differentiator by 2025.
To attract market share, P&C carriers must invest in innovative technologies that significantly enhance customer experiences, with an anticipated surge in the adoption of embedded generative AI solutions throughout the value chain.
Challenges and Innovations in Insurtech
Bill Pieroni, CEO of ACORD, notes that IoT technologies have become well-established, already providing substantial benefits for leading insurance carriers worldwide.
A performance gap is expected to widen, separating those who leverage IoT effectively from their less adaptive competitors.
Although AI’s influence will continue, its true effects will unfold over a longer period than many early adopters might assume.
Initial projects will likely focus on cost reductions, but AI’s eventual impact will transform multiple operational areas.
Tom Rasmussen, VP of Product, Claims at Carpe Data emphasizes that insurers that succeed in 2025 will adopt a more intentional and strategic mindset, identifying the business areas that yield the highest returns on investment (ROI).
The effective implementation of AI should prioritize innovations that align closely with tangible business outcomes instead of merely adopting the latest technological trends.
Garret Gray, President of Global Insurance Solutions at CoreLogic predicts significant developments in Insurtech solutions that can perform image-to-scope tasks, automatically generating work scopes for insurance claim estimates.
This advancement will largely arise from improvements in AI technology, particularly multimodal AI.
Mike Allee, President, UCT states that the adoption of IoT within the insurance realm has hit a crucial tipping point.
Although life insurance trails in this area, by 2025, the extensive data generated by IoT, paired with its scalability, will present compelling business cases for investments and growth alongside AI innovations.
Future Directions and Predictions
Jason Kaminsky, CEO of KWH Analytics posits that by 2025, underwriters are likely to utilize AI to achieve significant financial advantages.
In sectors requiring complex assessments, such as renewable energy, AI will function as a digital aide for underwriting teams, facilitating document reviews and data organization tasks.
Adam Denninger, Capgemini Global Industry Leader for Insurance highlights a pronounced gap exists in digital capabilities across the insurance landscape.
While specific needs differ by sector, all insurers are feeling the pressure to upgrade their outdated capabilities.
A noteworthy shift toward genuine digital modernization is imminent, likely to become a leading trend in technology throughout 2025.
Coleman Johnson, Chief Underwriting Officer at The Mutual Group observes that the performance disparity between well-financed insurance firms and their under-resourced counterparts is becoming increasingly evident.
In the years to come, AI and advanced analytics are set to accelerate this divergence significantly.
Craig Schedler, VP of Venture and Corporate Development, Northwestern Mutual Future Ventures expresses cautious optimism regarding the prospects for venture capital in the insurtech space next year.
Investors are keen on companies harnessing generative AI for practical applications that effectively address significant industry challenges.
John Riggs, CTO and SVP of Applied Technology Solutions for HSB explains that in 2025, innovations stemming from IoT and generative AI are poised to reshape various sectors within insurance, particularly regarding climate-related policies, equipment monitoring, and smart infrastructures.
These advancements will be crucial for how insurers manage risks, process claims, and customize products to meet individual customer needs.
Katie McGrath, CEO of Swiss Re Corporate Solutions, North America notes that generative AI is expected to have a profound short-term and long-term influence on both the insurance and reinsurance sectors, as it holds the potential to tackle key industry challenges.
The real value lies in the successful integration of AI models into existing human processes.
Chetan Kandhari, Chief Innovation & Digital Officer at Nationwide anticipates that ongoing advancements in agentic solutions will bolster insurtech capabilities, especially as AI continues to evolve amid an increasingly interconnected and IoT-driven landscape.
Haden Kirkpatrick, VP of Innovation & Venture Capital at State Farm believes that the continuous progression of IoT, generative AI, and other emerging technologies will empower carriers in 2025 to enhance predictive abilities and mitigate losses using advanced tools such as home telematics.
Suhas Sethi, Global Business Leader for Insurance at Genpact states that generative AI is set to play a growing role in anticipating and quantifying risks while effectively managing claims costs within the insurance industry.
Michael Moran, COO of Trucordia emphasizes that while the promise of AI is substantial, thorough feasibility reviews are essential for success in closely regulated industries like insurance.
Our organization aims to integrate generative AI technology to enhance our efficiency no later than the next year.
Peter McMurtrie, Insurance Practice Leader at West Monroe concludes that as we approach 2025, the insurance sector is expected to increasingly utilize AI and generative AI to tackle numerous challenges, including the demand for personalized services, the intricacies of risk assessment, and the pressing need to cut operating costs in light of rising loss trends—all facilitated by advancements in natural language processing (NLP).
Source: Dig-in
