Insurance in 2035: My Predictions as a Technology Futurist – 2025 Edition
Opening Summary
According to McKinsey & Company, the global insurance industry is projected to reach $7.5 trillion in premiums by 2025, yet traditional insurers face unprecedented disruption from technology and changing consumer expectations. In my work with insurance leaders across North America and Europe, I’ve witnessed an industry at a critical inflection point. The traditional model of risk assessment, policy management, and claims processing is being fundamentally challenged by emerging technologies and new market entrants. What was once a stable, predictable industry is now racing toward a complete transformation that will redefine how we think about risk protection, customer relationships, and value creation. The insurance companies that survive and thrive in the coming decade will be those that embrace this change rather than resist it.
Main Content: Top Three Business Challenges
Challenge 1: Legacy Technology Infrastructure and Digital Transformation Resistance
The insurance industry is grappling with what Deloitte describes as “technical debt that has accumulated over decades.” In my consulting work with major insurance carriers, I’ve seen firsthand how legacy systems create massive operational inefficiencies and prevent innovation. These outdated platforms, many built in the 1980s and 1990s, cannot support the real-time data processing, AI integration, or seamless customer experiences that modern consumers expect. As noted by Harvard Business Review, insurance companies spend up to 80% of their IT budgets simply maintaining existing systems rather than investing in innovation. The result is an inability to compete with agile insurtech startups that are capturing market share by offering instant policy issuance, personalized pricing, and frictionless claims processing. I’ve advised organizations where simple product changes took months to implement due to these technological constraints, creating significant competitive disadvantages.
Challenge 2: Changing Risk Landscape and Climate Change Impacts
The World Economic Forum’s Global Risks Report consistently identifies climate change and extreme weather events as top concerns for the insurance industry. In my strategic foresight work with reinsurance companies, I’ve observed how traditional actuarial models are becoming increasingly unreliable as climate patterns shift. According to Swiss Re Institute, natural catastrophes caused $120 billion in insured losses in 2022 alone, highlighting the growing gap between economic and insured losses. The industry faces a dual challenge: accurately pricing climate risks while maintaining affordability for consumers. I’ve worked with organizations struggling to model emerging risks like cyber threats, pandemics, and supply chain disruptions that don’t fit neatly into historical data patterns. This requires a fundamental rethinking of risk assessment methodologies and the development of new products for risks that didn’t exist a decade ago.
Challenge 3: Talent Gap and Skills Mismatch
PwC’s annual insurance industry survey reveals that 72% of insurance CEOs are concerned about the availability of key skills within their organizations. Through my leadership development programs with insurance executives, I’ve seen how the industry’s talent crisis extends beyond technical skills to include digital literacy, innovation mindset, and customer experience expertise. The traditional insurance workforce, trained in actuarial science and underwriting, lacks the data science, AI, and digital marketing capabilities needed for future success. As Accenture reports, the insurance industry will need to reskill nearly 50% of its workforce in the next three years to keep pace with technological change. I’ve witnessed organizations where senior leaders dismiss emerging technologies because they don’t understand them, creating innovation bottlenecks and missed opportunities.
Solutions and Innovations
The insurance industry is responding to these challenges with remarkable innovation. Leading organizations are implementing several key solutions:
First, AI-powered underwriting and claims processing is revolutionizing risk assessment. Companies like Lemonade and Root are demonstrating how machine learning algorithms can process applications in seconds and settle claims in minutes. In my consulting work, I’ve helped traditional insurers implement AI systems that reduce claims processing time by 70% while improving fraud detection accuracy.
Second, IoT and telematics are enabling usage-based insurance models. According to McKinsey, telematics-based auto insurance could capture 40-50% of the market by 2030. I’ve advised insurers implementing smart home devices and wearable technology that create continuous risk assessment and prevention opportunities, transforming insurance from reactive protection to proactive risk management.
Third, blockchain is emerging as a solution for fraud prevention and operational efficiency. The Harvard Business Review highlights how distributed ledger technology can create immutable records, streamline reinsurance contracts, and enable parametric insurance products that automatically trigger payouts based on verifiable data. I’ve worked with organizations piloting blockchain solutions that reduce administrative costs by 30% while enhancing security.
Fourth, digital ecosystems and platform business models are creating new revenue streams. Forward-thinking insurers are partnering with automotive manufacturers, smart home companies, and healthcare providers to embed insurance into broader customer experiences. This approach, as documented by Deloitte, allows insurers to capture value throughout the customer lifecycle rather than just at policy renewal.
The Future: Projections and Forecasts
Looking ahead to 2035, I project several transformative shifts in the insurance landscape. According to IDC, global spending on AI in insurance will grow from $1.5 billion in 2021 to $5.7 billion by 2025, driving massive efficiency gains and new business models. My foresight exercises with industry leaders suggest that by 2030, over 60% of personal insurance policies will be dynamically priced based on real-time behavioral data from connected devices.
The market size projections are staggering. PwC estimates that the global insurtech market will reach $158 billion by 2030, representing both a threat and opportunity for traditional players. In my strategic planning workshops, I guide executives through “what if” scenarios including fully automated insurance marketplaces, AI-driven personalized coverage, and blockchain-based micro-insurance products for emerging markets.
Technological breakthroughs will accelerate this transformation. Quantum computing, which I’ve been studying closely, could revolutionize risk modeling by processing complex climate and economic scenarios in minutes rather than months. Similarly, advances in generative AI will enable hyper-personalized policy creation and customer service that anticipates needs before they’re expressed.
The industry transformation timeline is compressed. Within five years, I expect most major insurers to have fully digital core systems. Within ten years, the distinction between insurance and technology companies will blur significantly, with tech giants capturing substantial market share. By 2035, insurance will be largely invisible, embedded seamlessly into products, services, and daily life.
Final Take: 10-Year Outlook
The insurance industry of 2035 will be fundamentally different from today’s landscape. Risk protection will become increasingly personalized, proactive, and integrated into our digital lives. Traditional annual policies will give way to dynamic, usage-based coverage that adjusts in real-time. The most successful organizations will be those that transform from claims payers to risk prevention partners, leveraging data and AI to help customers avoid losses rather than just compensating them afterward. The opportunities are enormous for companies that embrace innovation, but the risks of disruption are equally significant for those clinging to outdated models and mindsets.
Ian Khan’s Closing
The future of insurance isn’t about incremental improvement—it’s about fundamental reimagination. As I often tell leadership teams, “The greatest risk in insurance today is refusing to take risks tomorrow.” We stand at the threshold of an era where technology will transform protection from a transactional necessity to an integrated aspect of our connected lives. The organizations that thrive will be those that see disruption not as a threat, but as the ultimate opportunity to create greater value for customers and society.
To dive deeper into the future of Insurance and gain actionable insights for your organization, I invite you to:
- Read my bestselling books on digital transformation and future readiness
- Watch my Amazon Prime series ‘The Futurist’ for cutting-edge insights
- Book me for a keynote presentation, workshop, or strategic leadership intervention to prepare your team for what’s ahead
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About Ian Khan
Ian Khan is a globally recognized keynote speaker, bestselling author, and prolific thinker and thought leader on emerging technologies and future readiness. Shortlisted for the prestigious Thinkers50 Future Readiness Award, Ian has advised Fortune 500 companies, government organizations, and global leaders on navigating digital transformation and building future-ready organizations. Through his keynote presentations, bestselling books, and Amazon Prime series “The Futurist,” Ian helps organizations worldwide understand and prepare for the technologies shaping our tomorrow.
