Our Top 3 2025 Insurtech Predictions

1. AI’s Impact Comes Into Focus

2023 was the year of insurance AI hype, and 2024 was the year of getting serious about AI solutions and implementations. 2025 is going to be the year that those AI investments pay dividends. 

When applied correctly, AI has a lot to offer underwriters. It can help them prioritize the right submissions, better track ongoing appetite changes, and more. While AI won’t ever replace human underwriters, it can empower them to focus their time and expertise in the places that will deliver the most value.

This can add up to big improvements, in everything from high-appetite bound business to negotiations with reinsurance partners, and we expect those improvements to be felt this year across the industry. Insurance organizations that prioritized meaningfully incorporating AI into their underwriting processes will have a noticeable advantage over their competitors who didn’t.

2. UX Will Be Increasingly Important for Insurtech

Historically, insurance technology has not had the best reputation for user experience (in fact, often quite the opposite). That’s finally starting to change, and we expect 2025 will accelerate the trend. We’ll see UX become increasingly critical to insurtech solutions, particularly for underwriting, as it plays a key role in retaining staff.

The insurance industry is in the midst of a massive retirement wave, and relatively few younger workers are interested in joining the field. Competition for hiring and keeping the best talent is expected to heat up significantly, and technology can be a key differentiator in attracting staff. 

Digital-native Millennial and Gen Z workers generally have high expectations for technology tools, and low patience for slow, cumbersome systems. Companies that can offer modern, easy-to-use tools will be best positioned to attract and retain young underwriters. 

As more and more underwriting positions need to be backfilled, it will be more important than ever that insurtech solutions offer an experience built around the user. On the vendor side, insurtech providers will need to center UX in their offerings, or risk being left behind.

3. Holistic Underwriting Solutions Will Dominate

Part of the reason insurance technology has traditionally offered subpar UX can be blamed on how insurtech systems tend to be set up: in siloes. It’s common for everything from the PAS to the underwriting workbench to individual data sources to be mostly disconnected from each other, requiring underwriters to hunt down the information across multiple systems. 

The problem has actually intensified in recent years, as insurers add more and more data sources for their underwriters’ use. And that’s not even counting the amount of information that lives offline in static PDFs or excel docs. 

In 2025, the most successful solutions for underwriting are going to be the ones that address the entire underwriting experience as a whole, and bring everything together into a single interface. This not only improves user experience, it also allows meaningful improvement to the underwriting process itself. Underwriters can make faster, better decisions with all the information they need available at their fingertips, and with fewer opportunities for things to slip through the cracks.

Incremental updates within individual siloes will always be limited in what they can accomplish for underwriting teams. Insurtech solutions that offer a holistic approach to the underwriting process confer real competitive advantages on the organizations that use them, and we’ll see that start to play out in the market this year.

2025 promises to be a big year for insurtech, and we’re excited to see what’s in store! One thing that’s certain: we won’t be slowing down any time soon.

‍New year's resolution to update your underwriting systems? Check out Federato’s self-guided platform tour and learn how you can win the right deals, faster in 2025.