Key insurance industry trends that will continue in 2025 and beyond.

The insurance sector is considered one of the laggards in adopting advanced technologies. Until the digital revolution gained momentum, most players in the insurance sector were satisfied with outdated systems. However, with the rapid spread of new-age technologies such as artificial intelligence (AI) and the Internet of Things (IoT), the industrial landscape is evolving, and incumbents are developing strategies to digitally transform their companies. Implementing any new trends in Insurtech should be a top-down effort, with senior management leading the effort. From evaluating the penetration of new Insurtech solutions to changes in consumer behavior, the CIO's office must manage everything from assessing the penetration of new Insurtech solutions to ushering in the era of digital transformation within the organization.

12 key industry trends in insurtech

Here are 12 ways IT managers can leverage new technologies in the insurance industry to enhance their organizations' digital strategies while engaging customers:

1. The need for speed

In this rapidly changing world, the insurance industry is forced to keep up with the times. New market entrants in the form of digital insurers and innovative startups are introducing new products and services much faster than incumbent insurers. This means that established companies need to act faster to remain relevant. This has caused a shift in the thinking of insurance industry leaders and experts as the need for innovation has become clear to all participants.

Therefore, the right strategy for non-life insurance companies is to understand customers holistically and develop products and services that meet their expectations and needs, including on digital platforms. Their marketing strategies should also position their value proposition appropriately to a tech-savvy audience.

The industry is moving from a conservative and outdated system to an increasingly innovation-driven digital culture. Insurers want to move toward greater innovation, improving customer and employee experiences, increasing flexibility, and innovative use of existing technologies to solve legacy insurance problems such as risk claims processing and policy sales. As such, we will now see many insurance companies modernizing their legacy systems and applications to become more future-ready.

2. Increase self-service for policyholders

About 81% of consumers want self-service options, and this includes policyholders. They now expect to be able to do more for themselves without picking up the phone and talking to an insurance company's customer service representative. As customers become more tech-savvy, they are turning to insurtech trends as a way to purchase insurance policies, manage them, settle payments, file claims, etc. While putting power and control in the hands of the consumer will greatly improve the customer's quality of service. experience, it will also benefit the business by reducing customer acquisition costs, increasing insurance agent productivity, increasing customer retention, accelerating claims processing and enhancing brand equity and positioning. However, to expand this capability, insurers must be digitally mature enough to create platform-agnostic apps and portals to facilitate customer queries.

3. Make your mobile apps optimized and future-ready

Carriers use mobile apps to attract, serve and retain policyholders, and developments that add value for consumers help position carriers as vital long-term partners. With mobile apps making it easy to access customer locations and important data, offering personalized rewards is easier than ever. At the same time, field interactions are becoming more effective as relationship managers (RMs) provide a clearer view of product features using tablets.

However, in today's scenario, it is not just about mobility. We're talking about rich features, an attractive UI, and a highly customizable experience. Potential buyers don't have the time to search through their portfolio for the right product and want auto-populated recommendations with easy access to human interaction via chat or call.

This year, apps will not only serve as a secondary mode of accessing core policy information but can integrate telematics tools and deliver a streamlined claims experience to help improve policyholder engagement.

It is important for an IT manager to monitor application performance across metrics such as user experience, data security, cross-device compatibility, and conversion. In the future, apps will become the single point of contact with your potential customers and the entire transaction from purchase to claim settlement will be done through the app itself. Therefore, IT managers must develop mobile strategies with a vision for the future of the application only.

4. The use of artificial intelligence is gaining momentum

The demand for personalized insurance offerings is leading to the emergence of usage-based insurance as a primary business model. Thus, artificial intelligence (AI) as a technology driver constitutes one of the most important trends in the insurance industry. According to McKinsey research, AI will change every aspect of the insurance industry by 2030. With the advent of intelligent machines, biosensors, and deep learning algorithms for common objects; The insurance industry is facing a major shift from “paying damage” to “preventing damage.” While this shift in landscape may seem slow and happening in the background, the simultaneous emergence of IoT and AI in the public space will render the current way of handling claims obsolete and pave the way for automation of the claims process. As a result, IT managers must develop strategies and embrace the latest trends in the insurance industry to prepare the organization for the rapid increase in data from connected devices.

Integrating generative AI into insurance is driving a transformative impact on the industry. In the future, insurance companies that have invested in advanced data analytics will apply Gen AI to enhance the capabilities of their existing AI systems.

Here are some questions that IT managers need to find answers to within their organization:

Are your employees ready for advanced training?

Is your organization financially prepared to implement cognitive insurance technology?

How will risk be defined in the age of wearable technology?

How can Gen AI be used to improve existing datasets?

5. Low code development for faster time to market

As insurers press the accelerator to achieve digital transformation at the eleventh hour, low-code platforms are helping them accelerate digital transformation by allowing them to build applications and portals faster. Since their inception, low-code platforms have steadily increased in popularity as they solve some of the most pressing problems facing IT teams. No-code tools stretch overburdened internal resources, reduce backlogs, and improve productivity. In fact, Gartner showed that the market share of low-code solutions increased by 22.6%, while traditional high-performance custom development declined by 23%.

The most important feature that makes low-code insurance platforms so attractive is the accelerated time to market for new digital applications and products compared to traditional development projects. It allows business stakeholders to update and manage applications and software using intuitive drag-and-drop functionality. With intermediate or even basic experience with applications and software, insurers will be able to quickly implement new and different user interface features that customers need in a fraction of the time typically required.

6. Improve environmental, social and governance (ESG) compliance.

The insurance sector faces unique challenges that can be linked to environmental, social and governance (ESG) criteria. Insurers are evaluated not only on their sustainability reports, but also on their initiatives in how they continually address carbon emissions, take the necessary steps to diversify their workforce and increase transparency in their management structures. Governments and government bodies also legally obligate companies, including insurance companies, to move towards a low-carbon economy and manage climate-related risks.

On the other hand, insurance companies themselves are aware of the impact of ESG on their business and business performance. About 85% of global insurers believe investments (91%), risk and internal audit (90%) and underwriting (88%) will undergo significant changes alongside their ESG obligations. As a result, current and future trends in the insurance industry will focus on ESG compliance as a way of doing business. They will liaise with relevant authorities to identify the best ways to address ESG requirements and understand their impacts.

7. Growing admiration for underwriting tools

Centralization of data and business processes is one of the greatest benefits of digitalizing the economy. Of the various insurance dashboards that will emerge in the coming years, the Underwriting Toolkit will be one of the most useful technology additions.

As the name suggests, an underwriting workbench is a central workspace that houses an underwriter's most valuable digital tools and supports the entire underwriting process. The resulting comprehensive underwriting dashboard streamlines workflow, saving time and energy while enhancing the employee and customer experience. At the same time, this new technology in the insurance industry is also paving the way for integrated and collaborative working. This will undoubtedly be more than just beneficial for people moving to a digital way of working using AI and machine learning.

8. Blended insurance is gaining momentum

Integrated insurance, one of the current technology trends in the insurance industry, is based on the concept of “meeting customers where they are.” This means that it can usually be purchased as part of the purchase of another product (for example, personal car insurance purchased from a car dealership, or travel insurance offered during the airline ticket booking process). This is one of the key digital trends in the insurance industry, which not only improves the affordability of insurance services but also helps in improving customer engagement and eliminating risks in the process.

Insurers will look to find new and innovative areas to launch integrated insurance products. Hence, there will be more partnerships between grocery and insurance companies in the coming years, leading to greater market penetration.

9. Move towards distributed infrastructure

With the help of numerous field agents and desk-based insurance managers, the insurance industry has operated in a distributed manner since its inception. However, thanks to technological intervention, all players and stakeholders are gradually finding themselves on the same page. Companies that had not yet adopted this business model or had obvious gaps in their systems were forced to simplify everything during the pandemic. Against this backdrop, recent trends in the insurance industry could be an improvement on this strategy. We will see core business systems moving to the cloud and tightly coupled with various insurtech tools and platforms to create a digital insurance ecosystem. This will help insurers launch new products faster and improve customer experience.

10. Prepare to disrupt blockchain

The insurance industry is an easy target for tech-savvy scammers. Since the basic premise is to detect fraud and prevent risk, blockchain technology is a natural candidate for adoption in the insurance industry. Issuing insurance policies through smart contracts and encrypting medical records will make transactions secure and efficient, as well as ensuring transparency between insurance companies and reinsurers.

The Blockchain Insurance Industry Initiative (B3i), a collaboration between global insurance and reinsurance companies, includes companies such as Allianz as stakeholders and is involved in creating blockchain applications for the industry. As large players adopt blockchain technology in their core businesses, it is necessary for medium and small players to keep up with technology trends in the insurance industry. IT managers should keep an eye on blockchain technology penetration as it will likely disrupt the insurance landscape soon.

11. Keep your data safe

Insurance companies have access to sensitive customer information, which makes them vulnerable to cyberattacks. The risks are even higher because the industry has traditionally operated on the basis of trust. Every technology update involves moving to a new platform and training across the entire department, exposing information to potential threats. Even a short-term attack in which attackers compromise a single system can damage brand reputation and increase customer churn. While data security measures such as intrusion detection and prevention systems are evolving, attackers are also working to hone their skills. Staying one step ahead requires proactive measures such as regular security audits, contingency plans to mitigate risk, and advanced security training.

IT managers need to allocate sufficient resources to ensure data security, prevent breaches, and maintain a strong accountability system to ensure robust security. To attract new customers, the promise of data security is perhaps the most underrated offer, with far-reaching consequences.

12. The emergence of open insurance systems

Cloud-based digital ecosystems are one trend in the insurance industry that is rapidly gaining momentum. Since they are hosted in the cloud, it becomes easier for insurance companies to connect their offerings with those of other providers. This allows insurance companies to differentiate themselves from competitors and develop innovative products tailored to customer needs. The insurance industry is expected to embrace digital ecosystems and embrace open insurance models. These platforms, with their flexibility and end-to-end operations, will soon be the key to maintaining competitiveness. The introduction of open insurance not only creates an enabling environment for embedded insurance, but also allows small and medium-sized insurance companies to explore and benefit from integrating insurance into their offerings.

Final thoughts

The above-mentioned latest trends in the insurance industry are constantly being applied around the world to improve services and improve business. To keep up with these trends in the insurance industry, insurance companies can partner with underwriters. Implementing flexible and scalable insurance software solutions can reduce operational costs by preventing fraud and automating service, thus giving insurance agents more time to get their business up and running.