More than three fourth (78%) of the insurers participating in a study, plan to increase their technology spending in 2025. At least 33% expect a 10% to 19% rise and 14% forecasting an increase of 20% or more according to the new study.
According to the report Predicting the future for insurance: Areas to watch in 2025 brought out by insurance news portal https://www.dig-in.com/ the focus is on enhancing customer experience, with customer service, sales and claims management each accounting for 18% of technology investments.
AI and machine learning are going to be the leading digital transformation priorities in 2025, 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.
The report says that Generative AI has already been deployed by one-third of firms and 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 also reshaping digital strategies, with 35% of respondents identifying customer demands for improved experiences as their top priority. Insurers are working to streamline onboarding and licensing for agents to foster productive partnerships, as unnecessary hurdles can discourage agents from remaining with carriers.
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.