Artificial intelligence (AI) will “undoubtedly” still be the key theme in insurance in 2025, according to a new report.
GlobalData’s Insurance Predictions 2025 report states that AI was the leading theme within the insurance sector in 2024 but that in 2025 more use cases can be expected from insurers, brokers and reinsurers “across all product lines.”
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The report notes that the technology can be used to improve customer service, fraud detection and prevention. It adds that more long-term trends will see underwriting revolutionised, “as AI can identify patterns and risks in historical data (as well as what causes claims) far more efficiently than humans can.”
According to a GlobalData survey referenced in the report, 44% of global consumers are either quite comfortable or very comfortable with insurers using AI tools to determine their premiums.
“Data like this should inspire insurers to accelerate rolling out AI tools across the value chain. It can dramatically improve efficiency and help reduce costs,” the report says.
One reason given for AI being so popular among consumers is its ability to give instant and 24/7 responses.
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By GlobalData“AI advancement in insurance will be very much consumer-driven, if the interest to use it is there then insurers will have to react to customer demand and implement it across the business or risk losing business to their more advanced competitors,” the report says. Therefore, consumers being as comfortable as they are with it at this very early stage of AI in insurance suggests that it is going to become extremely influential and transformative over the next decade.”
ESG and cyber insurance
Elsewhere, environmental, social and governance (ESG) factors and cyber insurance are predicted to be the second and third most significant themes in the sector during 2025, respectively.
GlobalData’s report notes that ESG is already a central part of insurers’ strategies but expects it to become more pertinent still as through more related government policies.
“The increase in global ESG-related regulation implies that governments want businesses to take ESG risk more seriously,” the report says.
Of cyber insurance, meanwhile, GlobalData forecasts that there will be a sharp growth in commercial demand over the next few years and suggests that personal cyber insurance could also be set for “sharp growth in 2025 and beyond.”
Growth in the cover, which protects policyholders from financial losses and liability due to cyberattacks, is being driven by high-profile cases of businesses being attacked and increasing awareness among consumers of their online exposure.
