Transitioning from retiring professionals and attracting new talent · 2.The technical transformation of core systems · 4.In addition, rising business costs, inflation, aggressive litigation and regulatory pressures are forcing insurers to reconsider offering coverage to higher-risk properties. The digital age, while providing convenience, also brings with it significant cybersecurity vulnerabilities. The rapid evolution of technology leaves no room for indecisive people. The emergence of artificial intelligence (AI) and generative AI (GenA) systems offers innovative ways to assess and manage risks.
In fact, Deloitte's global insurance outlook for 2025 reveals that the areas with the highest number of GenAI implementations to date are distribution, risk management and claims management. In fact, 91% of insurance companies are already investing or planning to invest in AI technology, and one in ten specialty insurers will expand their use of AI in 2025, but many actuaries (84%) are concerned about a lack of technical skills, while only 43% of insurers trust automated recommendations from predictive analysis tools. Insurers must reevaluate their coverage models and anticipate different environmental threats, ensuring that they are fair to their customers and sustainable for the company. In 2025, ESG criteria are no longer a secondary aspect, but rather a fundamental consideration that shapes the very structure of insurance strategies and product offerings.
However, where will that talent come from? The Chamber of Commerce predicts that by 2036, 50% of the current insurance workforce will retire, leaving more than 400,000 vacant positions unfilled. While the expected increase in layoffs is exacerbating talent shortages, it's also creating new opportunities to capitalize on displaced executives. If you would like to learn more about the predictions for 2025 in the insurance and financial services sectors, you can download our most recent report. B2B Website Design by Motion Tactic.
The insurance industry in 2024 is at a crossroads, facing a convergence of technological, regulatory and social challenges. To thrive in this dynamic environment, insurers must not only adapt to change, but also proactively anticipate and shape the future. By tackling these ten main challenges head-on, insurance companies can position themselves as resilient, customer-focused and forward-thinking entities for years to come. Augmented reality, networked devices and other emerging digital technologies have opened up new avenues that can create new opportunities of revenue for insurance companies.
It is advantageous for managing industry operations. However, the slow pace of transformation makes it one of the most serious problems in the insurance industry. Technological advances are responsible for rapid changes in customer behavior and expectations. However, insurance industries are struggling to keep up with this technological evolution.
Investment in digital platforms and solutions has become essential to improve operational efficiency and reduce exposure to risk. The outdated general insurance technological infrastructure (old policy and insurance systems) is hampering the insurance company's growth and its ability to regulate operating costs, business demands and customer requirements. At the same time, it is diminishing the overall efficiency of organizations by diminishing profit margins, since the maintenance and preservation of outdated and obsolete technologies and processes have far exceeded their value. Thanks to advanced analytics, robotic process automation and other emerging applications, insurers today have the ability to optimize basic operating processes, such as sales and general insurance underwriting.
In addition, it provides insurance companies with a certain degree of resilience and scalability, allowing them to respond to changes overnight with minimal downtime. Customers don't just expect companies to meet their demands, but to do so in an intelligent way. As a result, companies have to work with large volumes of data to extract meaning and value from it, known as strategic and practical business intelligence. A new era of business intelligence is coming, focusing on harnessing data to make informed decisions and gain a competitive advantage by focusing on the client.
While data is an asset, it must be properly managed, something that cannot be done with outdated methods or technologies. Data captured from a variety of digital sources helps insurers mitigate losses, improve insurance and claims management, manage prices, customize products and enrich the customer experience. A multinational insurer with multiple lines observed several problems in its general insurance segment. Whether it was managing an outdated technological infrastructure or unstructured data derived from multiple disparate systems, these challenges hampered the growth of the insurance business.
After consulting Damco, the insurer obtained information on the underlying problems affecting the business model. Damco experts reinvented all the technology and modernized it to adapt it to the latest trends in insurance. You can read more about this case study in detail on our website. Here's What I Learned at the 2025 PLRB Claims Conference.
In the short term, data discussion, reporting, and compliance are likely to be the biggest challenges. While the second pillar is nominally a tax reform, affected stakeholders in the financial, legal, IT and other stakeholders may need to be informed about these new rules and the potential implications for their functions. These affected units may need to collect, organize and share financial information, operational data, and transfer pricing data from multiple sources and, possibly, multiple geographic areas. These activities reinforce the potential need to invest in modern, centralized data collection capabilities.
Some insurers have stopped offering specific forms of insurance coverage in certain areas of the world, while others have restricted the scope of their coverage options. The National Association of U.S. Insurance Commissioners The U.S. announced its strategic priorities earlier this year and launched a statewide data collection campaign to better understand localized protection gaps in property insurance markets.
Although they are a direct problem for the insurer that insures an infrastructure asset, dams, flood defenses, drainage and poor energy systems contribute to increased risk for insurers, who increasingly pay more for events aggravated by poor infrastructure. Property and accident insurers need to be more prudent and precise in addressing the above issues in the insurance industry. Lincoln Financial Group, “Eight out of 10 of those surveyed say that insurance benefits other than health insurance are “essential or very important to an employer,” according to new research from Lincoln Financial Group, press release, November. The new green technology presents many opportunities for insurers to open new lines of business and try to reduce their exposure to carbon-intensive sectors, but it also presents new risks for the insurance industry.
As with any other product, insurance costs have to compete with other consumer income demands. In an economic environment where housing, food and fuel costs are rising, insurers run the risk of being considered expensive and not offering any immediate value because of a risk they perceive will not happen to them. As a frequent speaker at industry events, such as the Canadian National Insurance Conference, the Canadian Insurance Financial Forum, and the Northwind Professional Institute, James enjoys making riffs on all insurance-related topics. Along business lines, U.S. insurers should address growing loss trends in areas such as liability insurance for employment practices and may choose to take a cautious approach to some of the undervalued segments, such as the liability of directors and officers.
It is increasingly important for airlines to increase technological and operational excellence, innovate in product solutions and expand the insurance value proposition, making the insurance security network more reliable, accessible and resilient. In a highly competitive landscape, being among the largest general insurance companies requires the strategic adoption of tools such as general insurance systems. Karl is Deloitte's insurance leader in the U.S. Department of State, responsible for leading the company's overall strategy in the insurance sector, uniting the company's practice areas to serve the client portfolio of Deloitte insurance.
