Commentary/Opinion
The State of Insurance in 2025: Navigating Transformation Through Technology, Regulation, and Evolving Customer Needs
The global insurance industry steps into 2025 at a critical juncture, facing a familiar yet rapidly evolving landscape of challenges and opportunities. This year is poised to be transformative, requiring insurers to focus on agility, innovation, and customers to navigate complexities and meet new demands.
Several pivotal trends across technology, regulation, talent management, distribution, customer experience, profitability, and product innovation are reshaping the industry’s operating models and its future.
Dogan Kaleli, CEO at Stere, Founder at Nion, Ex-Allianz, LinkedIn Creator
News
Florida house advances bill to end no-fault auto insurance
The Florida House Commerce Committee’s Insurance Subcommittee has advanced several bills aimed at reshaping the state’s insurance landscape, including legislation to repeal Florida’s no-fault automobile insurance system and modify various property insurance regulations.
House Bill 1181 and its Senate counterpart propose to eliminate the state's no-fault insurance law effective July 1, 2026. Under the proposed changes, drivers would be required to carry bodily injury liability coverage with minimum limits of $25,000 per person, $50,000 per incident, and $10,000 for property damage.
Industry groups and Florida Gov. Ron DeSantis oppose the repeal, warning it could lead to increased insurance premiums. Michael Carlson, president of the Personal Insurance Federation of Florida, stated that the shift could result in more uninsured drivers and a rise in litigation due to the new bodily injury coverage requirements. DeSantis previously vetoed a similar repeal in 2021, and subsequent efforts have failed to pass.
The subcommittee also approved House Bill 643, which removes the requirement for insurance agents to make a “diligent effort” — defined as obtaining rejections from at least three authorized carriers — before placing policies with surplus lines insurers.
InsurTech/M&A/Finance💰/Collaboration
US, UK and France continued to take lion’s share of global InsurTech funding in 2024
Key Global InsurTech investment stats in 2024:
- Global InsurTech deal activity dropped by 47% YoY
- US, UK and France continued to dominate global InsurTech funding rounds with a combined share of 60% of all the deals in 2024
- Akur8, a machine learning-powered platform for insurance pricing, secured a $120m Series C funding round making it one of the biggest InsurTech deals for the year
The global InsurTech market faced another year of contraction in 2024, with both funding and deal activity continuing to decline.
Total funding fell to $5bn, representing a 35% drop from the $7.7bn raised in 2023 and a significant 64% decline from the $13.8bn recorded in 2020.
The number of deals also decreased sharply, with just 293 transactions completed in 2024, down 47% from the 554 deals in the previous year.
These declines reflect ongoing investor caution in the sector, as macroeconomic uncertainties and evolving regulatory landscapes limit capital inflows into InsurTech startups worldwide.
US, UK and France continued to dominate global InsurTech funding rounds with a combined share of 60% of all the deals in 2024
The United States remained the most active country in InsurTech deal activity, recording 137 deals (47% share) in 2024, though this was a notable decline from the 235 deals in 2023.
The United Kingdom followed with 24 deals (8% share), down from 52 in the previous year, while France secured the third position with 16 deals (5% share), compared to 27 in 2023.
Despite the overall downturn, the US maintained its dominant role in the sector, while the UK and France continued to show resilience amid the broader slowdown.
The sustained decline in global InsurTech investment highlights the sector’s struggle to regain momentum, as investors remain selective and focus on mature, high-value opportunities.
Daily FinTech News and Research
Research
Data Insight: Who’s Growing in Personal Lines?
[Ed. Note: Since market leader State Farm is not mentioned here we assume that this research was limited to larger publicly traded carriers]
A relative newcomer to the personal lines space—Lemonade—marked a milestone this week, announcing that it surpassed $1 billion of in force premiums, a measure of annualized premiums that the insurtech tracks on a regular basis.
But the number of renters, pet and auto policies underlying what Lemonade reported to be a 150% compound annual premium growth rate over its 8.5 years of existence, still represent just a fraction of those written by longstanding industry giants.
A year-end 2024 shareholder report indicates that Lemonade had 2.3 million customers at the end of December. While the policy counts are unavailable and are likely higher than customer counts for a company that has made the sales of multiple different policies to each customer a core component of its go-forward strategy, it’s still far away from the 34.5 and 37.3 million policies in force that Progressive and Allstate reported as of the end of February.
Home Insurance Price Hikes Are Far Outpacing Inflation. Here’s Where Premiums Cost the Most | Nasdaq
In recent years, homeowners insurance prices have risen far faster than inflation, with the national average premium for a typical policy reaching a staggering $3,303 in 2024.
From 2021 to 2024, home insurance costs increased an average of 24%, according to an analysis of insurance pricing data released Tuesday by the nonprofit Consumer Federation of America, or CFA. Nationally, it amounts to a $21 billion price hike across the board, with premiums rising at nearly double the rate of inflation. (Labor Department data shows that from December 2021 to December 2024, overall prices for consumers rose 13.2%.)
Per homeowner, that shakes out to a $648 increase in annual premiums over that three-year period, CFA found.
“The skyrocketing price of insurance premiums is deepening the housing crisis,” Sharon Cornelissen, CFA’s director of housing and a lead author of the report, said in a news release. “Homeowners across the country are feeling the strain.”
Where home insurance costs the most
CFA found that home insurance premiums have risen in 95% of all U.S. ZIP codes. In 1 in 3 areas, premiums rose by more than 30% over the past few years.
Some locations in particular have fared far worse — especially in the South.
Carriers Enhance Policyholders' Mobile Experience with App-Embedded Web Content, Expanded Telematics Capabilities and Integrated Mobile Device Features
Keynova Group, the principal competitive intelligence source for digital financial services firms, today announced the results of the Q1 2025 edition of its semi-annual Mobile Insurance Scorecard. In this competitive evaluation of the mobile apps and mobile websites offered by the top 12 U.S. auto and property insurance carriers, Progressive and GEICO tie for first overall for the mobile user experience, with GEICO winning for its mobile app and Progressive leading the market with its mobile web experience.
The latest findings highlight the increasing use of app-embedded browsers to broaden the content available within an app, along with the extension of telematics capabilities and leveraging existing mobile device features to facilitate insurance policy and acquisition actions.
"Framing web content within an app to streamline access to information and resources and integrating enhanced telematics tools into primary servicing apps are key actions that continue to build the value of carriers' mobile apps," said Beth Robertson, managing director, Keynova Group. "By strategically upgrading mobile features and integrating device capabilities, carriers can expand the use of mobile interfaces while increasing policyholder satisfaction."
Key Findings:
More Carriers Integrate Telematics, Add Accident Detection Telematics programs continue to advance with more carriers integrating telematics capabilities into their primary servicing apps and providing accident detection and related assistance. With State Farm adding its usage-based tool to its servicing app, 42% of carriers now offer a single app for both servicing and telematics, building recurring app usage and creating a higher-value channel for engaging policyholders. In addition, nearly 60% of firms' telematics solutions have moved beyond safe driving assessments to incorporate accident detection, including contacting emergency medical or roadside support. Half of carriers can also launch a claim on behalf of a policyholder when an accident has occurred. FULL ARTICLE
AI in Insurance
How A Long-Lived Super-Regional Carrier is Implementing AI in Claims
This article is part of an on-going series about technological and AI-related developments and advancements in claims processes and claims departments. View Series
Identifying the needs and pain points of customers and then developing solutions to better service them and other company partners—those are the most important promises that artificial intelligence and new technologies hold for those overseeing an ongoing transformation at Westfield.
Westfield is a super-regional property/casualty insurance carrier based in Ohio that’s been around since 1848.
Despite its long history, the company recently has embraced modernization, and it is undertaking a technology transformation, as it were, by updating processes and systems with the help of artificial intelligence.
Claims Journal spoke about these undertakings with Andrew Quinn, product manager for generative AI at Westfield, and Jason Bidinger, associate vice president of claims strategy and technology.
The conversation has been edited for brevity and clarity.
Survey: 82% of Insurance Leaders Name AI a Top Business Imperative, But Most Struggle to Deploy Solutions
Roots, creator of the agentic AI platform for insurance and InsurGPT™, the world's first generative AI model for insurance, today announced findings from its inaugural State of AI Adoption in Insurance 2025. The company surveyed more than 240 insurance executives to determine their AI adoption challenges and opportunities. Its report highlights those as well as emerging trends and provides recommendations for insurers to drive business growth and AI success.
Roots found that 82% of insurance executives are keenly focused on accelerating AI transformation to improve financial and operational performance, recognizing the significant positive impact it can generate. Results also indicate that insurers must upgrade and upskill technology and talent to meet their goals.
Key findings from the State of AI Adoption in Insurance 2025 survey include:
- Insurance leaders are enthusiastic about the possibilities for AI.
Nearly 90% express a positive opinion about employing AI, and 67% identify as "strongly in favor." A gap between AI exploration and practical deployments exists.
- Over 90% of insurers are actively exploring, testing or using AI capabilities.
- Only 22% of insurers have successfully deployed AI solutions in production.
- Roadblocks to AI adoption exist and likely impact production deployments.
Top concerns to AI adoption include skills and resource constraints (52%) data challenges (40%) and regulatory challenges (36%). AI priorities vary across business functions.
- Claims teams prioritize improving claims processing efficiency (72%), reducing claims cycle times (64%), and enhancing client satisfaction (45%) as their top three priorities for this year.
- Underwriting teams aim to focus on increasing premium growth (75%), increasing speed to quote (53%) and lowering loss ratios (43%) in 2025.
- IT Operations teams are working to integrate AI (or scale) throughout the business (65%), reduce operational costs (48%) and modernize the tech stack (45%). MORE
Are AI Agents Ready to Serve?
The latest iteration of artificial intelligence is emerging as a co-pilot, and possible competitor, to insurance professionals.
Meet Friendly John.
If you need a homeowners or auto insurance policy in the United States, he’s your bot. Gainfully employed at Boca Raton, Florida-based e-brokerage Nsure, Friendly John will ask questions, compare more than 50 carriers’ policies, and suggest the best one for the client’s needs. He’s almost, but not quite, full service: a human agent must bind the policy.
FAST FOCUS
2025 could be a crucial year in the development and deployment of agentic artificial intelligence—next-generation AI systems able to autonomously perform tasks through interactions with users, systems, and data.
Some in the insurance value chain are already beginning to use AI agents for basic tasks such as summarizing large documents and assisting customer service representatives in reviewing and updating commercial policies during the renewal period. Over time, the systems theoretically could become sophisticated enough to replace junior agents and brokers, industry sources say.
Insurance brokers and others must consider many issues in applying AI agents, including ensuring transparency regarding their operations, customer wariness regarding insurance functions that do not have any human involvement, and the potential for erroneous outputs that put users of AI in the insurance community also at risk.
“When you go on to our website and you want to run a quote, the process that’s taking place in the background is through the Friendly John Rater; those AI agents are…essentially running all of your quotes,” says John Haisch, Nsure vice president of automation and AI. “They’re collecting based on your data, going to carriers, processing the quotes, and then bringing them back into the system. You’ll have all of your insurance quotes, bindable, real quotes in anywhere from 10 to 15 minutes from a dozen or more carriers.”
Many IT providers tout agentic AI as the next iteration of development and functionality for generative artificial intelligence. MORE
David Tobenkin is a contributing writer for Leader's Edge. dtobenkin@hotmail.com
Fraud
Groundbreaking New Standard for Cross-Carrier Data Sharing Introduced by Shift Technology
Shift Technology, a provider of AI-powered decision optimization solutions for the global insurance industry, today introduced the Insurance Data Network (IDN). The network allows members to benefit from industry-wide intelligence made possible through the collaborative multi-carrier exchange of claims and related data. By participating, insurers gain valuable insights and analysis to enhance fraud detection and risk prevention throughout the entire claims lifecycle.
IDN has rapidly gained acceptance within the industry and is now live and operational. Four of the top five U.S. property and casualty (P&C) insurers are contributing members, among many others. The network encompasses a substantial majority of U.S. auto and property claims across all 50 states, and its claims volume is growing quickly. In just the first few months, members have already identified millions of dollars in net new fraud schemes thanks to IDN's advanced fraud and risk detection capabilities.
IDN allows insurers to get more value from their data and a better understanding of the forces impacting their business
"IDN empowers insurers to get more value out of their data by providing a secure environment in which to share it and collaborate with other carriers," explained Jeremy Jawish, CEO and co-founder, Shift Technology. "Gaining a more complete understanding of the forces impacting their business and the industry as a whole, and to do so quickly and efficiently, is an amazing value proposition and a new way to harness the power of shared data."
Recommended Events
Selected Upcoming Industry Conferences
[Ed.Note: Conference season is in full stride. Here are just a few that we suggest]. Also look for special 'Connected' discounts]
ClimateTech Connect, April 15-16, Washington
Digital Insurance Summit, April 28-29, Boston
InsurTech Hartford Symposium, April 29-30, Boston
InsurTech Summit, May 20, Virtual
Future of Insurance USA, June 12/13
Curators' Corner: Alan Demers and Stephen Applebaum
Curator’s Corner
Our Q1 2025 Thought Leadership articles. See InsurTech Consulting Insurance and InsurTech Blog link for all published articles).
Did You Know?
A Classic Risk: The Unique Coverage Options for Vintage Race Car Drivers
While participating in vintage race car racing can be a dream come true for enthusiasts, partaking means ensuring that a dream hobby doesn't turn into a financial disaster.
Vintage race cars, a subset market of classic cars, are some of the most valuable vehicles in the world. A symbol of a bygone era of racing, these cars are some of the most highly valued by collectors. In 2018, the world's most expensive car, a 1963 Ferrari 250 GTO, sold at a private auction for $70 million.
Vintage car racing takes place across the U.S., from Texas to Ohio to Virginia, with organizations such as the Sportscar Vintage Racing Association (SVRA) organizing annual events. And while participating in these events can be a dream come true for enthusiasts, partaking entails some work on the part of car owners—particularly to ensure that a dream hobby doesn't turn into a financial disaster.
“Coverage options have evolved over the years," says Bryant Kolle, regional vice president at Hagerty. “Today, the main coverage that clients can get includes storage, transportation and paddock damage. That is where the car is located 99% of the time and where significant losses can occur."
In addition, “if a vehicle is road legal, liability would also apply," Kolle explains. “Sometimes, depending on a client's profile, paddock liability is available for non-street legal race cars due to the high volume of spectators present at venues."
Paddock liability provides coverage for the vehicle while it's in storage, being worked on, serviced and maintained at a facility. It also provides coverage while the car is in transit, going into the trailer, to and from an event and while it's in the paddock and not on the racing surface. Additionally, paddock liability provides a first layer of physical damage coverage if, for example, damage is caused by a storm or another vehicle or if the car catches fire while in the paddock.