AI Value Realization, Customer Experience, Tech Consolidation, & More
It’s been a challenging past few years for insurance companies. For many lines of business within the Property & Casualty (P&C) space, profitability has suffered amid soaring inflation, catastrophic natural disasters, and rising reinsurance costs.
As we look ahead to 2025, though, there’s plenty to be excited about. And of course, how could AI not top the list? For years now, we’ve seen AI dominate conversations of emerging insurance technology trends at industry events, with promises of revolutionary change echoing through conference halls and splashed across booth backdrops.
But 2025 may well mark a pivotal shift in the AI discourse. The insurance industry is poised to move beyond the hype and into an era of practical application and tangible results. This is among five key insurance trends for 2025 that we’ll explore in this blog, alongside a renewed focus on the agent and customer experience, and the growing priority of technology consolidation.
Insurance Trend 1: Carriers Are Ready to Implement AI
If you’ve attended InsurTech Connect the past few years and walked around the show floor, you’ve certainly seen that AI is everywhere. This year, it seemed nearly every booth backdrop had AI featured in some capacity.
Yet in these past few years, it’s felt like AI is that thing every insurer is talking about but most weren’t ready to take the plunge yet. They were either unequipped to meet these insurance trends, or were unsure of how they wanted to deploy it.
As we enter 2025, the insurance industry is in the midst of a significant shift in how AI is perceived and used. While 2024 saw AI in the insurance industry as a hot topic of discussion and exploration, 2025 marks the year when AI transitions from research and proof-of-concept stages to full-scale implementation and value realization.
Insurers are now focusing on AI that drives process optimization and ultimately reduces operational costs. The emphasis is not necessarily on eliminating headcount but on increasing the productivity of the existing workforce. AI is being leveraged to automate mundane tasks, allowing employees to focus on higher-value activities that require human judgment, creativity, and empathy.
AI is also becoming a key factor in talent acquisition and retention. Insurance is an industry facing a persistent talent crunch and one that’s struggled to attract the next generation of workers. Companies that effectively deploy AI will find it easier to attract and retain younger employees.
By reducing the amount of routine and repetitive work, and freeing workers up to focus on high-value tasks, insurers will position themselves as a more attractive landing spot amid a competitive job market.
Insurance Trend 2: The Agent & Customer Experience Takes Center Stage
With the P&C market showing signs of softening in 2024, many insurers are gearing up for increased growth targets in 2025. This shift will place the spotlight squarely on agent and customer experience in insurance as carriers look to expand and focus on new customer acquisition.
During the hard market when carriers were more selective about the new business they wanted to write, there were plenty of stories of insurers being less responsive to agents seeking quotes for their clients. Carriers won’t have the same luxury in 2025 as they compete to earn more share of an agency’s book of business. Because agents say ease of doing business is just as important as price when it comes to placing new clients, it’s paramount that insurers streamline their digital experiences.
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One way to make life easier for agents and their customers: Meet their growing demand for digital self-service capabilities. Forward-thinking insurers are meeting insurance technology trends by investing in user-friendly platforms and mobile apps that allow policyholders to manage their accounts, file claims, and access information digitally with ease. Similarly, agents are able to do more through portals today around quoting, commissions, and licensing than ever before.
At the same time, insurers recognize that as they shift the agent and policyholder experience more online, the quality of every human interaction becomes even more critical. Not to mention how and where these interactions start becomes more important in this digital age.
These changes mark a paradigm shift in how customer service teams must operate. The goal is to create a seamless, ChanneLess® experience that combines the efficiency of digital tools with the empathy and problem-solving skills of human customer service reps and underwriters.
Insurance Trend 3: Carriers Prioritize Tech Consolidation
As insurers have embarked on their digital transformation journeys, it’s often meant a more complicated and elaborate technology stack. With AI vendors popping up left and right, managing all of these technologies is becoming increasingly difficult.
Entering 2025, there’s a trend emerging in how insurance companies approach their technology infrastructure. There’s a growing push towards consolidating tech stacks, with insurers looking to streamline their operations and reduce complexity.
Rather than piecing together multiple single-point solutions to address various needs, insurance companies are seeking out Insurtech partners who can solve multiple challenges with integrated platforms. This approach not only simplifies IT management but also enables better data integration and analysis across the business.
Some of the key drivers for insurers are reducing the need to manage multiple vendor relationships, minimizing integration challenges, and simplifying the user experience for both employees and customers. Plus, as carriers invest more heavily in AI tools, a consolidated tech stack allows for more effective deployment of AI and data analytics tools. This has an effect across the entire insurance value chain: underwriting, claims processing, customer service, and beyond.
As carriers continue to navigate their digital transformation journey, this insurance trend towards tech consolidation is likely to play a crucial role in determining which companies can most effectively leverage technology to gain a competitive edge in the market.
Insurance Trend 4: Climate Risk Factors
As the rate of natural disasters and extreme weather events has begun to trend upwards in recent years, insurance companies have been looking to meet these challenges and the opportunities they create head-on. Insurance carriers have had to rise to the occasion and meet a growing need for personalized, empathetic service experiences at a greater scale.
In terms of insurance technology trends, this has meant needing to be able to find ways to deliver in-depth experiences at scale. When a natural disaster strikes an area, it will lead to a vast increase in service requests that all serve as key moments in the policyholder-provider relationship. You’ll want to ensure each of these interactions leads to a positive, reassuring experience that instills trust and loyalty.
To ensure this, insurance companies will be looking into customer service technology that allows for an increase in interaction volumes without needing to sacrifice quality. Automatic routing, AI that can handle simpler inquiries automatically, and allowing for functionalities like easy screen sharing and video chat to create easier and more personal interactions.
Insurance Trend 5: Meeting Evolving Customer and Agent Expectations
Insurance technology trends are shifting to meet the equally changing trends of what both consumers and agents want from their insurance experiences. As new technology emerges, and other fields begin to adopt them, this sets the precedent for other industries to follow suit. Modern insurance customers are used to the rich, intuitive digital experiences they get from their online retail or entertainment streaming, and will ultimately be comparing all online experiences to these.
These expectations aren’t just from consumers, however: Insurance Agents are increasingly expecting more technologically advanced interactions, particularly younger ones. A much stronger preference for digital-first channels is present among agents 45 and younger, who are much more likely to want to chat digitally, interface with AI chatbots, or use text/SMS than their older counterparts. Meeting these growing expectations is crucial for maintaining retention and employee satisfaction.
This also extends to policyholders, who are looking for ways to hear more often from their insurance providers that more closely align with their communication preferences. Insurance companies are taking new approaches to sending claim status updates and billing reminders to their users, such as with SMS, better aligning themselves with modern expectations for customer service.
Learn more about how a modern approach that aligns with these insurance trends can improve your insurance call center experience: Download our free whitepaper.
