The insurance industry is rapidly evolving, driven by technological advancements, shifting consumer expectations, and emerging risks. As we approach the year 2025, insurance carriers must prepare for significant changes that will shape the future of the industry. In this article, we rounded up thought leadership around the market to find the top 2025 insurance carrier trends. But we took it a step further to bring into focus how these trends will impact leaders of claims, operations and IT. Ready to do some time traveling? Let’s explore how these trends will impact your future planning.
2025 Insurance Carrier Trends #1: The Growing Impact of AI on Claims Processing and Underwriting
Artificial intelligence (AI) is everywhere and it’s revolutionizing operations in the insurance sector, with significant implications for claims processing and underwriting. By utilizing predictive analytics and machine learning, insurers can optimize processes, detect fraud accurately, and deliver faster resolutions.
Why It Matters:
AI has the potential to increase operational efficiency and significantly reduce costs, and who doesn’t need that? Since these KPIs are pretty universal, exploring how to deploy AI effectively is an opportunity for everyone managing underwriting, claims, IT services and other operational functions.
What to Watch For:
- Advanced AI-driven FNOL (first notice of loss) tools that speed up claim responses during disasters.
- Predictive analytics refining accuracy in underwriting and catastrophe prediction.
- New players entering the space providing purpose-built AI tooling to support the insurance industry.
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Uncover more about AI trends in insurance operations.
2025 Insurance Carrier Trends #2: Escalating Demand for AI and Cyber insurance
While the push to use AI in business is growing, it also amplifies risks, resulting in expected increases in demand for AI insurance. In the coming years, insurers will need to develop AI-specific coverage options for themselves and their clients. AI insurance will cover risks such as equipment damage due to AI malfunctions, business interruptions resulting from system failures and cyber crimes. Cyber insurance itself is the fastest-growing subsector of the global insurance market.
Why It Matters:
With AI and cyber insurance representing a rapidly expanding market for insurers leading to unique coverage options, you’ll need greater tech knowledge and a more sophisticated workforce to support sales and claims of these new solutions.
What to Watch For:
- The evolution of underwriting guidelines and risk assessment models specific to AI usage.
- Developments in machine learning algorithms that can detect and prevent potential cyber threats.
- The rise of outsourcing strategies to harness and maintain a more tech-savvy workforce at scale.
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Get the scoop on AI insurance demand
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2025 Insurance Carrier Trends #3: Emphasis on Climate Resilience
With climate-related risks on the rise, it’s no surprise that extreme weather events continue to challenge traditional insurance models, driving the need for new solutions. To remain competitive and provide reliable protection for policyholders, insurance carriers will need to prioritize climate resilience strategies in their operations.
Why It Matters:
Climate-resilient insurers can better manage risks, reduce losses, and build trust with customers through proactive measures that address natural catastrophes and climate change. Tactically that means new products and more volume. You’ll need more specialized knowledge to lead through these changes, and scalable solutions to meet increased demand.
What to Watch For:
- Development of new coverage options for extreme weather events and other climate-related risks like flooding and wildfires.
- Development of innovative parametric insurance products that use satellite data and other technologies to speed up claims processing.
- Implementation of data-driven solutions to better assess risk exposure based on climate models.
- Specialized vendors providing services to help manage increased claims volume.
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Get more insights on climate resilience in insurance here and here.
2025 Insurance Carrier Trends #4: Modernization of Insurance Print and Distribution Communications
Insurance carriers are improving their communication tactics by better integrating digital and traditional print methods. Automated processes and managed print services ensure both compliance and personalization.
Why It Matters:
Despite advancement in digital technologies, printed communication remains crucial for regulatory compliance and customer preferences in the insurance industry. Print is not going away! But it is changing. By utilizing a combination of digital and print methods, you can ensure compliance while improving customer satisfaction, retention rates, and reducing operational costs.
What to Watch For:
- The rise of variable data printing for personalized customer communication.
- Embracing digital transformation in printing processes through automation and managed print services to drive efficiency.
- Outsourcing print and distribution tasks to expert vendors as the tech requirements get more sophisticated.
Learn More:
Read more about the latest personalization and print technology trends.
2025 Insurance Carrier Trends #5: Traditional Carriers Embracing Insurtech Innovations
Insurtech, the combination of insurance and technology, is rapidly transforming the traditional insurance industry. From AI-driven underwriting to blockchain-powered claims processing, traditional insurers are incorporating innovative technologies to improve efficiency and enhance the customer experience.
Why It Matters:
New innovations led by insurtech startups are improving the whole industry and can help traditional insurance carriers stay ahead of competitors and meet evolving customer demands for digital innovation. For those of you on the traditional insurance side, that means helping lead your organizations through digital transformation to reap the benefits – with great upside potential for your organizations and your own career.
What to Watch For:
- More insurtech startups entering the market.
- Partnerships between traditional insurers and tech companies.
- A pivot to more technically-savvy operational leaders
- Increased availability and adoption of advanced technologies and new vendors positioned to deliver them.
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Read about how insurtech is leading the industry forward.
2025 Insurance Carrier Trends #6: Prioritizing Workforce Transformation
The multiple whammies of The Great Retirement, a rise in claims and the need for more technically astute agents means insurance carriers must address a changing workforce. Insurers must upskill and reskill their employees to stay relevant in a digital-first market. Similar to the trend above, this transformation will involve updating legacy systems, investing in employee training, and redefining job roles, as well as finding partners with the right skills who can help carriers quickly scale.
Why It Matters:
As the insurance industry evolves, the workforce must adapt to meet new challenges and demands, and that means you must too! By ensuring that your organization is investing in the right technologies and training so employees have the necessary skills, knowledge and tools to excel in a digital landscape, you’ll be well-positioned to deliver improved productivity and better customer service.
What to Watch For:
- Greater emphasis on hybrid work models to enhance employee satisfaction.
- Specialized training to bridge the skills gap in areas like AI, customer engagement, and analytics.
- New purpose-built tooling and increases in strategic outsourcing partnerships as a cost-effective way to skill up services.
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Explore how workforce transformation is shaping the future of the insurance industry.
Conclusion
2025 is an exciting horizon for the insurance industry, marked by cutting-edge technologies, climate resilience, and customer-centric endeavors. By keeping a pulse on these trends, insurance carriers can foster growth, instill customer trust, and insulate their operations against future challenges.
As we look to the future, one thing is clear: insurers can’t do it alone. Specialized vendors like Covenir are needed to help fill the skills and volume gaps. Find out more about how Covenir services can help your organization meet the future.