“In 2024, the insurance industry experienced significant operational transformation, facing more pressure than ever to innovate, improve efficiency, boost profitability, and deliver a world-class customer experience,” Novidea chief revenue officer Jeff Heine said. “To help organisations prepare for the year ahead, our experts assembled a list of predictions that will shape how the industry progresses this year.”
The US insurance market: key predictions for 2025
Insurance mergers and acquisitions (M&A) are set to regain momentum as the US economy continues its recovery from pandemic disruptions.
Normalising interest rates are expected to drive increased venture capital (VC) investment in InsurTechs, while carriers will actively pursue MGAs. InsurTech platforms will be pivotal in ensuring seamless integration and standardised operations across acquired companies.
Reinsurers will witness modest growth despite escalating climate-related costs. With the rising frequency of weather-driven claims, reinsurers will depend heavily on advanced technology for risk visibility, relying on centralised data solutions to manage exposure effectively.
The cybersecurity insurance landscape will evolve, driven by incidents like the Crowdstrike outage.
In 2025, insurers will launch specialised policies addressing business interruptions caused by non-malicious tech outages. Specialty insurers must modernise their systems to accommodate these emerging risks.
The excess and surplus (E&S) insurance market, which excelled in 2024, will maintain its growth trajectory.
Companies like Novidea’s client Pathpoint exemplify this trend by adopting technology for automation, AI, and analytics. Pathpoint achieved a 20% growth in policy submissions and doubled its sales and underwriting operations through these advancements.
InsurTech-led ecosystems will drive innovation, providing modular solutions for greater flexibility. APIs will become increasingly critical as insurers enhance their marketplaces and integrate technologies across the insurance lifecycle.
The UK insurance market: trends for 2025
In the UK, carriers will face mounting pressure to expand distribution while safeguarding profitability. MGAs will play a central role, offering carriers tighter control over underwriting and diversified portfolios.
Innovation will be a strategic priority as the industry anticipates the BP2 initiative in 2025, which aims to set new standards. Unified platforms that integrate APIs will enable brokers, MGAs, and carriers to leverage advancements in AI, complex document generation, and data analytics, resulting in customer-centric innovation.
Climate extremes will present growing challenges. As these events become routine, they will strain insurers and policyholders alike, complicating premium pricing and risk management. High-quality climate data will be critical for resilience, while reinsurers and MGAs will collaborate more closely to navigate these challenges.
The London Market’s talent shortage will intensify. To attract younger talent, the insurance sector must highlight its innovative potential. Platforms like Novidea’s are central to fostering innovation, enabling firms to remain competitive while integrating an innovative mindset across departments.
Finally, artificial intelligence will reshape the industry. While AI’s transformative potential won’t materialise overnight, 2025 will see insurers focus on modernising their tech infrastructure to support AI-driven tools. Investments in advanced insurance management platforms, such as Novidea’s, will position organisations to thrive in the AI era.
Read the full blog from Novidea here.
Copyright © 2025 InsurTech Analyst
