With contributions from Gordon Hui | HSB
The choppy waters of COVID-19 may well be past us, but change is far from over. In 2025 and beyond, escalating climate change risks, economic turmoil, stringent regulations, and technological advancements will profoundly impact insurance trends. This means one thing: critical decisions lie ahead, reshaping the insurance sector and industry players.
Still, insurance has traditionally been cautious when adapting to new trends. Only 44% of insurance firms have a climate policy for investments, and 30% have a climate policy for the underwriting business. The numbers are lower for net-zero policies on underwriting activities, with only 3% of respondents having a net-zero policy.
The old excuses of legacy systems and outdated processes are becoming less convincing. Now is the time for insurers to truly transform. So, what trends will shape the industry in 2025, and how can you use them to get ahead of the curve?
Why Following Insurance Trends Is Crucial for Transformation
Insurance underpins progress. It’s the safety net businesses need to navigate every significant societal and economic change while innovating and taking calculated risks. However, with impactful challenges like climate change, cyber threats, and inflation evolving faster, insurance providers must adapt their processes and policies to address emerging risks.
[ Source: PwC Insurance 2025 and Beyond ]
Aside from an increasingly volatile market, strict regulations are also knocking on insurers’ doors. Insurers face higher costs and complexity as they adapt to ESG and data protection standards. All while being pushed to implement stricter underwriting criteria and increase premiums, especially in high-risk industries.
At the same time, InsurTech companies are moving fast, offering the personalization and end-to-end support customers thrive for, all embedded in a simplified user journey. Traditional insurance carriers must meet the competition where it’s at by enhancing customer experience and tailoring their programs and offerings.
By following trends, insurers position themselves as true partners in business resilience and unlock key opportunities for continuous business growth.
7 Top Insurance Trends for 2025
1. Predictive AI Technology
Insurance runs on data, and there is plenty of it nowadays. With the rapid adoption of data points feeding various software solutions, insurers can collect detailed data on everything, from construction site activities to equipment usage and structural integrity. This information allows artificial intelligence (AI) models to analyze big data, identify trends, and predict potential risks to policy providers and policyholders alike.
Accurate predictions enable carriers to define policies based on precise, real-time data, mitigating and reducing risks. For example, water management tools like Wint Water Intelligence leverage AI, signal processing, and data analytics to monitor water usage in real-time. This allows property owners and facility managers to assess risk more accurately and, hence, enables insurers to offer tailored coverage options.
Wint goes beyond monitoring by providing proactive water risk mitigation. When anomalies in water consumption are detected, the water supply can automatically shut off at the source of the leak, all remotely. By identifying water incidents as early as possible, Wint can prevent catastrophic damage and allow companies peace of mind by avoiding downtime or repair costs, as well as rising premiums and deductibles on their insurance policies.
[ Source: Insurance BUSINESS Magazine ]
Recent research has proven that construction companies using Wint file 73% fewer insurance claims and dramatically reduce the insurance payouts for losses by 90%. The impact of using AI-based solutions like Wint has already begun to transform the insurance industry. Last year, Wint launched a performance warranty program covering up to $250,000 in water damage. Backed by HSB, a Munich Re company, this program addresses the rising costs of Builder’s Risk deductibles, particularly for water leak damage exclusions.
2. Automation in Claims Processing
It’s no secret that policyholders want the most straightforward claims process possible. That means giving them speed, convenience, and accuracy in one journey. By embedding technologies like Machine Learning (ML) and Robotic Process Automation (RPA), insurers can automate critical stages of their claims processes, from document verification to claim validation and, eventually, the final payout.
Of course, the path to complete digitalization doesn’t come without hurdles. While a fully automated claims process may be the ultimate goal, operational risks are also essential to consider. Noteworthy risks include additional data privacy and security risks (e.g., sensitive data exposure, cyber threats), implementation risks caused by legacy system integrations, and unanticipated process failure risks due to bugs or errors.
The overarching goal is for every step of the claims process to be intuitive and frictionless (not just selected steps), resulting in a consistent and compelling experience. This requires evaluating underlying systems and workflows before investing in and incorporating new technology.
3. Personalized Insurance
Gone are the days when premiums were based on general demographic or firmographic factors. Individuals and corporations increasingly seek a bespoke package tailored to their needs and specific circumstances. Personalized insurance may have started with usage-based policies using telematics (which we will expand on below) but has since evolved significantly.
Now, sensors can monitor environmental conditions such as humidity and temperature, equipment status, and site-specific risks to adjust policy coverage in real-time. Wearables can track worker safety and fatigue levels, enabling insurers to offer premiums tailored to individual crew behavior and safety records.
Additionally, policies like Builder’s Risk Insurance can adapt to different project phases, providing customized coverage as a construction project progresses. Personalization enables higher accuracy, lower premiums, and less risk for all parties involved.
[ Source: Accenture | Insurance Blog ]
4. IoT Connected Devices
Today, IoT-connected devices are perceived as building managers’ best friends. By constantly monitoring a building’s vital systems, such as heating, cooling, humidity, power, and water systems, these devices offer instant, accurate data that can help insurers assess risk more precisely, adjust their policies accordingly, and review their pricing based on changing risk factors.
The real-time nature of these devices also supports damage prevention, especially if these tools offer additional features and capabilities. A water management platform like Wint offers stakeholders accurate data on water usage to identify patterns and predict trends over time for optimized use while bringing added value benefits such as reducing water waste and saving on water bills.
5. Sustainability and Green Insurance
In 2025, green is the only way to go. According to KPMG, 50% of digital leaders say that expectations of ESG transparency are driving their transformation efforts. Insurers specifically are just as eager to invest in sustainability, with 44% of insurance CEOs believing that ESG programs improve financial performance. These numbers are still quite optimistic and respond to ever-growing pressure from regulations, customers, and commercial competitors.
Insurance can advance sustainability efforts by providing compelling products that facilitate the adoption of renewable energies and materials and encourage a low carbon footprint. Such offerings include endorsements of eco-friendly replacement materials, broad coverage for alternative energy sources, and incentives for green-certified buildings (like the common LEED or BREEAM standards).
[ Source: LTD In-Depth | 2021 ]
6. Telematics
Telematics collects and transmits real-time data from devices, such as vehicles or other equipment, using GPS, sensors, and communication networks. It primarily deals with data acquisition and location tracking and is complementary to technologies like AI and ML, which analyze data and predict trends.
With the rise of tailored insurance coverage, telematics is an essential key competency. In auto insurance, for instance, telematics can analyze drivers’ speed and behaviors, enabling insurers to develop fully tailored pay-as-you-drive models and incentivize safe driving. In construction, telematics can monitor heavy machinery and collate data such as fuel consumption, maintenance schedule, or engine hours.
This data is crucial for insurers to assess risk more accurately, adjust premiums based on concurrent equipment usage and performance, and identify potential issues before they escalate into costly breakdowns or accidents that lead to insurance claims.
7. Emerging and Unprecedented Risks
From 2016 to 2023, nearly 70% of global losses from natural disasters were uninsured, equaling about $260 billion of uninsured losses in a given year. The protection gap can only widen with the continuous increase of natural disasters across the globe. Not only are such disasters increasingly dangerous – they are also increasingly frequent.
Of course, some regions are more susceptible to climate disasters than others. Within the United States, Florida is particularly at risk. Southeast Asian countries like the Philippines and Vietnam face frequent tropical storms. However, as seen by the recent flooding in Valencia, Spain, which killed over 200 people and resulted in billions of losses (as well as over 21,000 claims for home insurance), disaster can hit anywhere, at any time. Insurers today, more than ever, must have a broad plan for all the unexpected brute force that nature may bring.
[ Source: McKinsey & Company | Global Insurance Report 2025 ]
From Increased Premiums to Increasing Prevention
Insurance carriers continue to face significant profitability challenges despite higher premiums. In 2024, insurers again experienced severe catastrophe losses, with Hurricanes Helene and Milton alone causing estimated insurance losses of $27 to $45 Billion USD. Equally important, what were once considered “secondary perils”—including major Winter storms, floods, wildfires, and severe convective storms—have become a priority concern for insurers due to their increased frequency and severity.
In this environment, insurers are focused on making policyholder locations more insurable. They will continue to adjust premiums, deductibles, and coverage limits. Some may exit specific high-risk geographies (such as Florida) or unprofitable business segments. In some businesses, such as builder’s risk and high-net-worth homes, we will see an overarching trend accelerate: insurers making sensor technology an option or even a requirement for coverage.
More generally, insurers will continue to encourage policyholders to proactively reduce risk and potential losses, including for water-related perils. The traditional “repair and replace” value proposition of insurance is no longer adequate for insurance companies or policyholders. Instead, a new mantra of “connect and protect“–where the policyholder implements sensor-based and other data-driven technologies to actively predict and prevent their own risk–is taking hold and becoming accepted as commonplace.
“Advancing the intersection of data, technology, and insurance is crucial to better insurance outcomes for policyholders and insurers,” says Gordon Hui, SVP, Product Management for Applied Technology Solutions at HSB (part of Munich Re). “Our collaboration with Wint on AI-based technology and risk solutions to reduce water damage highlights our focus on where the industry is going.”
Strategic Partnerships Redefining Insurance in 2025
Adopting the position of a partner—not just a financial issuer—will enable carriers and commercial businesses to minimize risk across the board, stabilize costs, and future-proof the entire ecosystem. For example – Wint Water Intelligence, HSB, and Munich Re are driving together a meaningful change in risk management, offering holistic solutions to one of the most pressing challenges facing the property sector today: water damage.
HSB brings expertise in sensor technology, while Munich Re leverages its global reinsurance underwriting capabilities to provide tailored solutions for high-risk markets. Together with Wint, a tech leader in the water management space, they offer a comprehensive solution to mitigate water risks in buildings and prevent costly losses.
Our prediction is that we will see many more collaborations between insurance carriers and cutting-edge technology providers such as this over the next year.
