36% of insurers prioritise AI and machine learning.
For 2025, 78% of insurers plan to increase technology spending, with 33% expecting a 10% to 19% rise and 14% forecasting an increase of 20% or more, according to the “Predicting the future for insurance: Areas to watch in 2025” report.
The focus is on enhancing customer experience, with customer service, sales, and claims management each accounting for 18% of technology investments.
Amongst health insurers, customer service prioritisation jumps to 42%.
Artificial intelligence (AI) and machine learning are the leading digital transformation priorities, cited by 36% of respondents, followed by big data analytics (28%) and cloud infrastructure (26%).
AI is increasingly used in claims processing, underwriting, and risk assessment, automating routine tasks to improve efficiency and reduce costs.
Generative AI, already deployed by one-third of firms, is being explored for personalised solutions and data analysis. Smaller insurers with under $5b in premiums are more likely to be in early adoption stages, whilst larger companies are actively scaling or implementing AI solutions.
Customer expectations are reshaping digital strategies, with 35% of respondents identifying customer demands for improved experiences as their top priority. Instant access to digital funds after disasters is also seen as critical by the majority of professionals.
Insurers are working to streamline onboarding and licensing for agents to foster productive partnerships, as unnecessary hurdles can discourage agents from remaining with carriers.
Risks to look out for
Over a third (38%) of insurance professionals still consider inflation the top macroeconomic threat to the industry in 2025.
Other major risks include climate change—driven by events such as hurricanes, floods, and wildfires—and regulatory uncertainty, particularly at the state level in the United States, where rate-setting is closely monitored.
Health insurers express heightened concern over inflation, cyber risks, and a potential recession compared to other segments of the industry.
Carriers remain particularly focused on climate-related risks, with hurricanes, flooding, and wildfires amongst their top concerns.
The insurance industry is accelerating its digital transformation.
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