Key Points from Deloitte’s 2025 Global Insurance Outlook

The insurance industry in 2025 will undergo substantial transformation driven by evolving customer expectations, technological
advancements, regulatory changes, and new risk environments. Deloitte's 2025 Global Insurance Outlook provides a detailed analysis of what insurers can expect in the coming years, offering projections, strategies, and significant industry shifts that actuaries should consider.
1. Growth and Market Trends
By 2025, the global insurance market is projected to grow significantly, with certain areas of the business, particularly health, life, and digital insurance, experiencing faster-than-average expansion.
- Global Insurance Market Growth: The insurance market is expected to reach approximately $8 trillion in premiums by 2025, growing at a compound annual growth rate (CAGR) of around 4.5%.
- Sector-Specific Growth: Life and health insurance, which have become more relevant due to the aging global population and increased health awareness, will see higher growth rates. In particular, health insurance is expected to grow by 5% CAGR, while life insurance is anticipated to expand by 3.5%. Conversely, commercial insurance may grow at a slightly slower pace due to increased risk exposures, including climate change.
2. Digital Transformation and Technological Advancements
Insurers will continue their digital transformation journey, incorporating cutting-edge technologies like artificial intelligence (AI), machine learning, blockchain, and the Internet of Things (IoT) into their operations.
- Investment in Technology: It’s predicted that 50-70% of insurers’ technology budgets will be allocated to digital transformation efforts by 2025. AI will play a crucial role, with AI-powered underwriting, claims processing, and customer service becoming more mainstream. For instance, claims automation could reduce operational costs by up to 30%.
- IoT and Data Utilization: The use of IoT devices in personal and commercial lines is expected to increase, offering insurers real-time data for more accurate underwriting and pricing. The number of connected devices could exceed 50 billion globally by 2025, providing a wealth of data that will enhance predictive analytics capabilities.
- Blockchain Adoption: Blockchain, which promises enhanced transparency and efficiency in policy management and claims processing, is expected to be adopted by 30-40% of insurers in some form by 2025. This can result in more secure and efficient transactions, reducing fraud and improving trust in the claims process.
3. Customer-Centric Approach and Personalization
Consumer expectations have evolved significantly, and by 2025, insurers will be expected to provide more personalized, transparent, and digitally-enabled experiences.
- Personalization of Services: According to a Deloitte survey, 80% of consumers expressed a preference for insurance products that are tailored to their individual needs, with a specific interest in usage-based pricing models and greater control over coverage. Insurers that fail to offer personalized experiences risk losing 40% of their customer base to more agile competitors.
- Direct-to-Consumer (D2C) Models: The D2C model will continue to expand, with direct distribution channels and digital-first insurance products expected to account for 30% of the global insurance market by 2025. Younger consumers, in particular, prefer self-service, mobile-enabled platforms, creating new challenges and opportunities for insurers.
4. Risk and Regulatory Environment
New and emerging risks, including climate change, cybersecurity threats, and regulatory complexity, will significantly influence the insurance landscape.
- Climate Change and Catastrophic Risks: Climate change poses a growing threat, with an expected $1 trillion in insured losses from natural disasters annually by 2025. This shift will force insurers to adapt their models, with 30-40% of insurers expected to adjust their pricing strategies to account for increased risk exposure. Additionally, insurers will need to work more closely with governments and regulators to provide solutions that can address the evolving risk landscape.
- Cybersecurity Insurance: With the rapid increase in cyber threats, the market for cyber insurance will grow exponentially, estimated to surpass $30 billion globally by 2025. Insurers will need to balance offering coverage for data breaches and other cybersecurity risks while adapting to rapidly changing regulations in different jurisdictions.
- Regulatory Complexity: Global regulatory frameworks will continue to evolve, and insurers will face increasing pressure to comply with a patchwork of regulations across regions. Regulatory changes, such as Solvency II in Europe and evolving IFRS 17 accounting standards, will drive operational changes and cost implications. Insurers that adapt proactively to these changes will be better positioned to maintain profitability and avoid penalties.
5. Talent and Workforce Transformation
The future workforce in the insurance industry will be increasingly diverse and digital-first. Insurers will need to invest in talent acquisition, retention, and reskilling programs to keep pace with evolving demands.
- Workforce Evolution: It is anticipated that 50% of insurance employees will be engaged in roles related to data science, AI, and analytics by 2025, requiring new skill sets. Insurers will need to balance the integration of automation with the human touch to maintain customer loyalty and trust. At the same time, the demand for traditional actuarial skills remains strong, but with a growing emphasis on tech-savvy professionals who can work with data-driven tools.
- Retention and Diversity: To retain talent, insurers will need to foster a more inclusive, flexible work environment. Increasingly, the younger workforce (especially Gen Z) expects a more dynamic and inclusive corporate culture. 60% of millennials are expected to change employers every three years, so insurers must focus on career development and retention strategies to avoid the costly turnover associated with this trend.
6. Consolidation and Strategic Mergers
The insurance industry is expected to see further consolidation as firms look to scale, diversify their offerings, and leverage technology more effectively.
- Mergers and Acquisitions (M&A): The ongoing trend of M&A will likely accelerate, with large players acquiring tech-driven startups or partnering with insurtech companies. It’s estimated that by 2025, more than 25% of insurance companies will have entered into strategic partnerships or joint ventures to enhance their technological capabilities.
You can find Deloitte's 2025 Global Insurance Outlook here.