What’s in store for insurance in 2025 and beyond?

It can seem like a cliché to say that an industry has undergone major change but this is certainly true for insurance since the pandemic. The past five years have come with unprecedented disruptions and innovations. As the world adapts to new technologies and threats, what’s in store for insurance in 2025 and beyond?

Climate risks and collaboration

A new report by PwC identifies five key trends affecting the future of insurance. These are:

1. A widening trust gap

Trust in financial institutions is near an all-time low. Just half of respondents to the Edelman Trust Barometer trust the financial services industry. This has made customers more wary of insurance. The long-term success of the industry hinges to a great extent on whether it can restore trust. 

2. Evolving customer preferences

Customers increasingly expect insurers to go beyond their basic functions. In 2025, end-to-end solutions are in demand, analysts suggest. Consequently, to remain competitive, insurers must reimagine how they serve customers and enhance the customer experience.

3. An increasingly digital world

The impacts of technology on our lives are well known. Developments including robotic factories and crypto assets are part of the new reality and insurers need to have plans to deal with them. Generative AI is already re-shaping the way insurance firms work and the way customers interact with insurers.

4. Climate risk and sustainability

With the world breaching 1.5 degrees Celsius of warming for a full year for the first time in 2024, the physical and transition risks of climate change are coming into ever sharper focus. Indeed, global ESG* assets are predicted to hit $40 trillion by 2030, research has shown. On the other hand, only 45% of insurers rate ESG as a very important factor in their underwriting activities, according to analysis by the PwC Market Research Centre. How the industry adapts to rising climate premiums will play a significant role in shaping its future.

*environmental, social, and governance

5. Convergence, collaboration and competition

Partnerships and collaborations are insurance buzzwords in 2025. To connect with customers in a way that is relevant to them, insurers are starting to rethink how they collaborate with traditional competitors, big tech companies and adjacent industries.

A rapidly changing picture – but some things never change

So far this decade, the insurance industry has evolved in response to factors including changing customer expectations and advancements in digital technology. The second half of the 2020s looks set to be shaped by more technological advances and climate risks.

However, in a shifting landscape, some basic principles seem destined to remain equally important. Building trust and improving customer experience have a key role to play in the success of the insurance industry between now and 2030.