In this post we will explore some of the predictions and projections for the future of insurance in 2025 and beyond.

The Rise of the Omni Policy

We recently published a guide to how AI is transforming the insurance industry. Insurers are making use of advanced AI modules to process their customer data, allowing them to create bespoke policies with wider cover while automating certain tasks and streamlining the claims process.

One possible end point of this blending of IT, AI, and business is the “omni policy”. Essentially, some insurers are predicting a world in which customers pay a single premium for a single policy – powered by AI – which provides full cover for every risk in every circumstance. Will this be the future of insurance?

Rather than purchasing separate insurance for health, for travel, for personal injury, and so on, customers will instead receive blanket cover for all risks, which they could amend depending on their changing circumstances.

This is one of the four possible “scenarios for insurance” suggested in the SAS paths to 2040 whitepaper.

Leveraging Data for a Personalised Approach

Earlier this year we explored how data is revolutionising certain insurance sectors. With every passing year, insurers are getting better at collecting, storing, and leveraging customer data to create more competitive products while enhancing the customer service experience.

There are already signs of how insurers may take this relationship with customer data even further. Some insurers are using wearable tech to gather real-time data on their customers’ health, offering rewards and discounts to any customers that commit to healthy activities.

Similarly, some insurers are encouraging customers to share “data for discounts”. Any customers who choose to share personal information, whether it’s driving habits or spending patterns, can receive a more fine-tuned insurance package with certain discounts on their cover.

But of course, more data can bring more problems.

Cybercrime Meets AI

The risk of cybercrime increases every year, and certain agencies have warned that 2025 might be the year that cybercriminals perfect the use of AI in their cyberattacks.

Plus, as they collect and store more detailed customer data, insurers will have to contend with increasingly stringent data privacy regulations. Regulations such as GDPR and The Data Protection Act already ensure that businesses cannot take their customer data for granted. As the regulatory landscape evolves, data has the potential to create new challenges, as well as new opportunities, for insurers.

Responding to an Aging Population

Across the world, people are living longer. According to the latest World Health Organization report, 1 in 6 people will be aged 60 or over by 2030. What’s more, the number of people aged 80 or more is projected to triple over the next 30 years.

There are two ways in which an aging population might transform the world of insurance in the coming years:

• Changing Policies – An aging population will force many insurers to reconsider how they design and deliver certain insurance products, including health insurance, life insurance, and personal injury cover.
• A Potential Recruitment Crisis – Many insurers will retire in the coming years, taking all of their skills and experience with them. If they’re not doing so already, insurers will have to start thinking about how they attract and retain the next generation of insurers.

How Capacity Insights Can Support You Through 2025 and Beyond

At Capacity Insights, we are future-focused and deeply invested in the potential of data to provide the best possible products and services to our customers.

We draw from predictive modelling, dynamic analytics, and other data science systems to drive our underwriting strategy. With our support, you can transform your product offering in 2025.

Find out more about how we use data science insights to create our bespoke insurance schemes.