2025 Insurance Industry Trends Highlight New Players and New Solutions

When the InsurTech experiment began a decade ago, it took some time for insurers, investors, and the industry to sort it all out. What was the perceived value of a particular technology? Was it a ‘whizbangy’ feature or a meaningful paradigm changer? Was its value directly tied to a business case? What would be its long-term competitive impact —once the dust had settled and everyone was using it? 

In many ways, though, Insurtech’s relationship to the insurance business is still evolving.  Technology is changing. The criteria for use is changing. Investment in technology and Insurtech is changing. And all of this is happening at the same time that the world of risk and customer needs is changing. Where is it all headed?

I invited three of today’s most respected InsurTech experts to join me in weighing in on what is trending in insurance for 2025, answering some of our questions about the changes that will matter most to insurers. You can watch the full webinar, 2025 Trends Accelerating the Future of Insurance, to get their complete thoughts and predictions.

My panelists are:

Andrew Johnston, Global Head of InsurTech, Gallagher Re

Megan Kuczynski, Senior Strategic Advisor, InsurTech Insights

David Gritz, Co-Founder, InsurTech NY

And myself, Denise Garth, Chief Strategy Officer, Majesco

Let’s get started!

What have we learned from the decade of InsurTech? What has changed? How is it evolving?

Andrew Johnston 

It’s difficult to make sweeping generalizations for 10 years’ worth of fairly nuanced activity, but I think what the last 10 years has shown us is that there is a huge appetite in the industry to innovate. That is not necessarily how the insurance and the reinsurance industry is perceived.

The fact that we have, with open arms, welcomed technology companies and invested in them and “put our money where our mouths are,” is indicative of us wanting to stay abreast of technological developments.

The speed at which the InsurTech space almost exploded was quite jarring for a lot of people and quite overwhelming. There were a lot of buzzwords thrown around and a lot of people potentially suffering from fear of missing out, which was in some cases accelerated by non-industry VCs and PE funds whose objectives were different from our own. And I think one of the things that we’ve learned over the last 10 years is that while a VC (Venture Capitalist), as an example, might be interested in growth at any cost, we as an industry might be more interested in things like underwriting results or loss ratios. And I think in some cases, those two worlds don’t necessarily overlap, but I think that the greatest thing to come out of this, beyond individual company adoption of technology, is the fact that technology as a line item is in basically every single insurance company on earth now, in a way that it probably wasn’t 10 years ago. It is absolutely seen as a critical way to grow, be relevant, be efficient, and be cost-effective. That is a welcome addition to our industry.

Megan Kuczynski 

I’m very much interested in the vernacular — how we describe ourselves. If you go back maybe three or four years, we heard, “the InsurTechs versus the incumbents,” if you remember that. That’s all faded away. The business culture and the industry have evolved so that now there is much more collaboration and a greater spirit of partnerships. I’m sure we’re going to see more consolidation, but I see that as an evolution. If you go back to the .com era, when there were brick-and-mortar businesses and there were e-businesses, we see now how every company became an e-business. In the same way, it will be interesting to see if this term InsurTech will still be in the business vernacular for the next 10 years.

InsurTech Investment

Denise Garth

Some InsurTechs have been successful. Some of them haven’t. Some have survived but aren’t quite profitable yet. This makes it a challenge for those who might be looking to either invest in them or to acquire them. What do you think the next decade looks like for InsurTech investment?

David Gritz 

I think the next 10 years are going to be about how InsurTech is the new Research and Development. If you think about how R&D is done in the biomedical industry or the pharmaceutical industry, it’s not usually the Mercks and the Pfizer’s and the Johnson and Johnsons that are developing new and innovative products and working at the cutting edge. They are the ones that have the distribution. They have the market share, and they have the controls and the ability to handle regulation.

Instead, it’s the biotech startups, or the pharmaceutical startups that work in labs, get through clinical trials, and then when they’re proven, then the incumbents acquire them. I think that’s very much what we’re going to see over the next 10 years in InsurTech. InsurTech is a great sandbox to play and to test out new concepts, whether it’s technology that can be adopted to improve workflow, or it’s new products that don’t really exist today, or even life products that are tailored towards people with heart disease or chronic illnesses.

InsurTechs are really good at doing things quickly. They’re not the greatest at doing things at scale. Incumbents will be like the large pharmaceutical companies. The success of different incumbents will depend on how quickly they are at integrating new technologies and partnering with these startups, whether it’s on the reinsurance side or the technology side.

From a funds perspective, we are very much interested in startups that have a home inside of a carrier or a larger tech vendor — they might be considered a feature. We are not looking to have a portfolio of all unicorn exits, so we’ve modeled our fund accordingly.

Andrew Johnston 

We have seen a fundamental shift in the grey matter of who’s investing. When InsurTech was ramping up from an investment perspective, from 2018, traditional venture capitalists and private equity firms were very, very active for a short period of time. That has shifted.

There has been an exodus of these large, traditional funds, who realized that the timeframes that they expect these things to deliver for them is fundamentally different in our industry. The investment grey matter now is far more patient, and really understands what the success criteria of our industry ought to look like. And, it’s no surprise that we’re actually seeing insurers and reinsurers investing at unprecedentedly high rates.

Last year was the highest year on record for insurers and reinsurers to be investing. There are still some standalone funds that are sort of niche, boutique, InsurTech investors. I think now is an incredible opportunity for InsurTech to seek out the right kind of capital that is sympathetic, patient, and that understands that this is not this is not a bubble, and the returns on this are going to take time. The upside is that we are going to see a much higher quality of business come out, because there’s going to be less pressure to grow for the sake of growing, and there’s going to be much more focus on delivering the right kind of results for our industry.

Denise Garth

There has also been a shift in private equity — either private equity-backed insurers or MGAs that are startups, or private equity-backed technology companies. Even, in some cases, publicly traded technology companies that have access to a lot of capital where they can actually acquire these companies, bring them into the portfolio, help them scale and grow, and look at additional investment to make them valuable. 

Andrew Johnston

Yes. We are seeing a lot of consolidation and acquisition activity at the moment, both because,  valuations have come down, but also —  insurers really know what they’re looking for these days, and technology is less bamboozling. They have clearer mandates around what success looks like. All the stars are aligning for some really good acquisitions, really good synergies… bringing the right kind of technology in-house.

Megan Kuczynski 

You can see that shift in the makeup of who’s turning up at the InsurTech conferences.

The Protection Gap Challenge

Denise Garth

I read last week where, in some cases, people’s mortgage payments which include taxes are now less than their property insurance. It’s a crisis. The rise in property values due to inflation and increased risk have increased prices. Carriers are leaving markets and shifting products. They may be selling off different products within their portfolio. It isn’t just P&C, but it’s also affecting life and health-related products on the L&AH side. With that as a backdrop, where does the protection gap fit in all of this?

David Gritz 

On the L&AH side, I think the biggest challenge is that life insurers (especially larger life insurers) want to move to be more asset managers and wealth managers because there are better margins there. This means that the majority of their customers are upper middle class…on up to family offices. Insurers are focusing much less on the middle market or the lower income levels. They might have products that are available there, but their distributors find that it’s difficult to build a book of business here, so they just ignore it. It’s a tragedy, because the people that need term life products or individual disability or cancer and accident policies are typically the people that have the least availability to get to them.

My hope is that there will be more InsurTechs that come to fill this gap and use technology to make it more profitable for an individual agent to spend time on those accounts. But it’s going to take the whole industry to get behind it, and I think it may need more than just the industry — maybe social pressure or governmental pressure.

Denise Garth

How does technology fit into this equation? How do we rethink our operational model and our business processes to address protection gaps? Because, if all we’re doing is bringing forward what we’ve done in the past, we’re not really changing how we’re doing business and helping to drive down the cost and the operational aspects of the business. How does technology, and specifically AI come into play?

Andrew Johnston 

I think AI is both part of the problem and part of the solution to these issues.

There does seem to be a tendency at the moment to hyper-fixate on individual prices and individual products using AI. And I think one of the issues that insurance companies are facing is, how do you look to reward risks that on paper, look very, very good without putting so much pressure on your balance sheet and simultaneously making people uninsurable against the backdrop of all of these unprecedented climate events — which are exacerbating the protection gap challenge?

So, I think the role that AI can play is to not drill down so much on an individual or a particular price or a particular product that they exacerbate the problem further, but we should also use AI for things like predictive analytics, where we try and forecast these very clear changes in climate events. Or, use AI to improve some operational efficiencies so companies can be run more efficiently.

Denise Garth

We have talked about shared social responsibility between insurers and customers, and we’ve talked as an industry about risk resilience and trying to predict and prevent, yet we don’t seem to have made the progress that we need to do. Megan, what is it that you’re seeing as you are pulling this climate tech event together?

Megan Kuczynski 

As insurance companies are pulling out of these critical markets, it’s a great time for innovation and disruption. I think we’re going to see, as Andrew mentioned, a rise in new technologies related to predicting, preventing, and leveraging AI for more sophisticated and advanced modeling.

What I’m hearing in conversations is that the homeowner — the property owner — needs to be empowered to make changes to mitigate their risk. Right now, they’re just given a report, and they are either denied…or their policy isn’t renewed. But if we dive deeper and the property owner has a list of things that they can do to mitigate the risk — that conversation can be reopened. That’s what’s lacking right now, but I think that’s what we’re going to see coming.

I also see community insurance coming to the forefront, using very novel, new technologies. Ric Insurance, for example, for $14 a month, provides a $10,000 parametric policy for flood. Can you imagine if the folks in Asheville had had this opportunity?

I think there are going to be layers upon layers of innovation coming. And with these larger insurance companies pulling out, other innovators will fill the gaps.

Denise Garth

This has been great!  Thanks to our panel for their perspectives and insights. In our next installment, we’ll discuss technology’s practical applications for the business — what AI will and won’t do for us and how technology can work hand in hand with business strategy.

How is your organization dealing with financial pressures and risk? Are you employing technology to make your company risk resilient?

Every insurer needs to consider the future of their business in light of current trends and pressures — but also in light of how today’s technology has the ability to empower new products, channels, operating models, and more. Bring your conversation to Majesco and let us show you how we’re helping insurers to rapidly bring new business models and products to market, lower costs, improve productivity, drive real business outcomes, and apply the latest technologies to today’s pressing issues. Contact Majesco today!