The Future Of Insurance: Look What Lies Ahead (2024)

FAQs

What will insurance look like in the future? ›

Insurers will engage in more process automation across marketing, distribution, underwriting, claiming, and policy servicing. Leading insurers will use automation and empathy during the next decade to reach outcomes such as driving revenues and policies in force, optimizing expenses, and minimizing risks.

As life expectancy continues to increase and people continue to become more health conscious, access to health data will make it easier for insurers to interact with customers regarding their well-being and adjust premiums accordingly. Customers will not only hear from their insurance provider when a death occurs.

AI and machine learning are helping insurers make more precise risk assessments and provide hyper-personalized insurance offerings. Such forecasts may help explain why the global AI in insurance market, estimated at USD $4.59 billion in 2022, is expected to reach USD $79.86 billion by 2032.

While the main value-chain elements in insurance will remain, nearly all key operational processes in 2030 will be far more streamlined, enabled by automation and digitization, with much greater degrees of straight-through processing, especially in standard personal and small commercial lines of business.

So as of now, the answer to whether AI can fully replace insurance agents remains a resounding no. While AI continues to augment and streamline insurance processes, the indispensable role of human agents persists.

The property insurance sector is under heavy pressure from poor financial performance due to unexpectedly high inflation, a shift of exposures to higher-risk areas, and rising reinsurance costs.

Personal lines set to drive growth again in 2024; commercial lines growth to be led by property. We forecast total direct premiums written (DPW) growth of 7.0% in 2024 – an upward revision from 5.5%, driven by momentum in personal auto – and 4.5% in 2025 after nearly 10% growth in 2022 and 2023.

You could need life insurance in retirement to cover final expenses, pay off your final debts and estate taxes, and leave an inheritance. If you've already got these goals covered though, then you likely no longer need life insurance.

Is insurance a good career for the future? ›

It's a monumental shift, but there are massive growth opportunities as the insurance industry continues to expand and become more complex. The next few years mark a significant transition as legacy insurance professionals retire — leaving 400,000 jobs open — and paving the way for the next generation.

Final expense insurance is a whole life policy that pays medical bills and funeral expenses when you die. It's also known as burial or funeral insurance. It's a popular choice among seniors.

Insurers are attempting to be tech-enabled, mastering data and its many sources in order to quickly assess and price risk, as well as serve customers when they need, learn about and purchase insurance. As they've seen in other industries, this is possible with a flexible technological base and strategic IT function.

Flexible coverage options, micro insurance and peer-to-peer insurance will become viable options in the long run. Reinsurers will provide risk capital directly to digital brands, and regulatory frameworks will accommodate shorter value chains. Lifestyle apps will re-imagine the insurer-insured relationships.

Claims expenses are increasing—driven by a mix of high repair and replacement costs due to inflation, social inflation and surging natural disasters. The latter, in particular, have driven property reinsurance rates up by as much as 50% in the U.S.

Distribution channels are expanding and shifting

The insurance distribution landscape has evolved significantly in recent years. It began with the rise of insurtechs like Lemonade, Hippo and Policygenius, which introduced more digital and user-friendly processes to the personal policy market.

Insurers must dedicate substantial budgets to emerging technologies such as artificial intelligence (Al), cloud, cybersecurity, and analytics. Digitalization will accelerate insurance processes to provide better customer interactions, automate claims settlement, and increase the overall speed of execution.

Many insurers have responded to climate-related financial risks by withdrawing their services from highly exposed markets, raising premiums, and gutting coverage. These are important market signals about the scale and scope of the economic effects of climate change.