Insurance in 2035: My Predictions as a Technology Futurist
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. I’ve consulted with insurance leaders across three continents, and what I’m seeing is an industry at a critical inflection point. The World Economic Forum reports that over 40% of insurance executives believe their current business models will be unrecognizable within five years. Having worked with Fortune 500 insurance companies on their digital transformation journeys, I can tell you that the comfortable, predictable world of insurance is rapidly disappearing. We’re moving from a reactive claims-paying model to a proactive risk-prevention ecosystem, and the companies that don’t adapt will struggle to survive. The transformation ahead isn’t just about adopting new technologies—it’s about fundamentally rethinking what insurance means in an increasingly connected, data-rich world.
Main Content: Top Three Business Challenges
Challenge 1: Legacy Systems and Technical Debt
The insurance industry is drowning in technical debt. In my consulting work with major insurers, I’ve seen firsthand how decades-old mainframe systems and siloed data architectures are preventing innovation. As Deloitte research confirms, legacy systems consume up to 80% of IT budgets in many insurance companies, leaving little room for innovation. I recently advised a 100-year-old insurance company that was running critical policy administration on systems that predated the internet. Their challenge wasn’t just technological—it was cultural. Employees had built entire careers around maintaining these systems, creating resistance to change. Harvard Business Review notes that technical debt costs the insurance industry approximately $30 billion annually in lost productivity and missed opportunities. The impact is real: slower product development, inability to integrate with modern platforms, and growing vulnerability to cybersecurity threats. When I speak with insurance CEOs, this is their number one concern—how to modernize without disrupting their core business.
Challenge 2: Changing Customer Expectations and Digital Experience Gaps
Today’s insurance customers expect Amazon-level digital experiences, but most insurers are still operating like it’s 1999. Accenture research shows that 67% of insurance customers would consider switching to digital-native providers for better user experiences. I’ve observed this shift firsthand while helping traditional insurers compete with insurtech startups. The gap isn’t just about having a mobile app—it’s about creating seamless, personalized experiences across all touchpoints. A major European insurer I worked with discovered that their claims process involved 17 separate handoffs between departments and systems. Customers had to repeat information multiple times, creating frustration and delays. As Forbes reports, customer satisfaction scores for traditional insurers have dropped 15% in the past three years, while digital-first providers are seeing rapid growth. The implications are clear: insurers that fail to meet modern customer expectations around speed, transparency, and personalization will lose market share to more agile competitors.
Challenge 3: Data Management and AI Integration Complexity
Insurance is fundamentally a data business, but most companies are sitting on mountains of untapped data. Gartner estimates that insurers use less than 10% of the data available to them for decision-making. In my work helping organizations implement AI strategies, I’ve found that insurance companies face unique data challenges. They have decades of historical data in incompatible formats, regulatory constraints on data usage, and organizational silos that prevent comprehensive data analysis. A North American insurer I consulted with had customer data spread across 47 different systems, making it impossible to create a single customer view. PwC research indicates that insurers who successfully leverage AI and advanced analytics could improve underwriting accuracy by 40% and reduce claims processing costs by 30%. The business impact of poor data management is enormous—missed underwriting opportunities, inefficient claims handling, and inability to detect fraud patterns. As we move toward more personalized, usage-based insurance products, data capabilities will become the primary competitive differentiator.
Solutions and Innovations
The insurance industry is responding to these challenges with remarkable innovation. From my front-row seat advising global insurers, I’m seeing several transformative solutions gaining traction.
Cloud Migration and Microservices Architecture
First, cloud migration and microservices architecture are enabling legacy modernization without complete system replacement. Leading insurers like Allianz and AXA are successfully implementing hybrid approaches that gradually replace legacy components while maintaining business continuity.
AI-Powered Customer Service
Second, AI-powered chatbots and virtual assistants are revolutionizing customer service. Lemonade, a digital-native insurer, processes some claims in seconds using AI, creating experiences that traditional insurers struggle to match.
IoT and Telematics
Third, IoT and telematics are enabling usage-based insurance models. Progressive’s Snapshot program and similar initiatives from other major carriers use real-time data to create personalized premiums.
Blockchain for Fraud Detection
Fourth, blockchain is emerging as a solution for fraud detection and claims processing. Companies like Etherisc are building decentralized insurance protocols that automate claims verification and payment.
Advanced Analytics Platforms
Fifth, advanced analytics platforms are helping insurers extract value from their historical data. Munich Re’s Digital Partners unit exemplifies how traditional insurers are building innovation capabilities to compete with startups.
These solutions aren’t just technological upgrades—they’re creating new business models and revenue streams while improving operational efficiency.
The Future: Projections and Forecasts
Looking ahead ten years, the insurance landscape will transform dramatically. IDC predicts that by 2030, 60% of insurance products will be usage-based or on-demand, fundamentally changing risk assessment and pricing models. I project that the industry will bifurcate into two main categories: mass-market automated insurance and high-touch advisory services for complex risks.
Market Growth and Transformation
The global insurtech market, currently valued at $5.48 billion according to Grand View Research, is expected to grow at 51% CAGR through 2030. What if climate change accelerates to the point where traditional risk models become obsolete? We’re already seeing insurers withdraw from high-risk areas, creating protection gaps that new parametric insurance products will need to fill.
Technological Breakthroughs
Technological breakthroughs in quantum computing will enable real-time risk modeling at unprecedented scales, while AI will move from assisting human underwriters to making autonomous decisions for standardized products.
Transformation Timeline
The transformation timeline is accelerating:
2024-2027: Digital Core Systems
- Most insurers implementing fully digital core systems
- AI-driven underwriting becoming standard for personal lines
- $20 billion cyber insurance market by 2025
2028-2032: Autonomous Operations
- AI-driven underwriting standard for personal lines
- Blockchain-based smart contracts automating claims processing
- 60% usage-based insurance products by 2030
2033-2035: Ecosystem Integration
- “Invisible insurance” embedded in other services
- Dynamic, usage-based coverage replacing annual policies
- $1.1 trillion in new industry value by 2030
Market Size Projections
McKinsey estimates that these changes could create $1.1 trillion in new industry value by 2030, but also displace traditional roles and business models. The market size for cyber insurance alone is projected to reach $20 billion by 2025, according to PwC, representing just one of many growth opportunities for forward-thinking insurers.
Final Take: 10-Year Outlook
The insurance industry of 2035 will be virtually unrecognizable from today’s model. We’ll see the rise of “invisible insurance”—products embedded in other services and transactions, automatically adjusting coverage based on real-time risk assessment. Traditional annual policies will largely disappear, replaced by dynamic, usage-based coverage that activates when needed. The role of insurers will shift from claims payers to risk prevention partners, using IoT data and AI to help customers avoid losses before they occur. The biggest opportunities lie in creating new insurance products for emerging risks like cyber attacks, climate events, and technological disruptions. However, insurers face significant risks from regulatory changes, cybersecurity threats, and potential disintermediation by big tech companies entering the insurance space. Success will require not just technological adoption, but fundamental business model innovation and cultural transformation.
Ian Khan’s Closing
The future of insurance isn’t something that happens to us—it’s something we create through intentional innovation and courageous leadership. As I often tell the insurance executives I work with, “The greatest risk in insurance today is the risk of not changing.” We stand at the threshold of the most exciting transformation in the history of risk management, where technology enables us to protect people and businesses in ways we never thought possible.
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
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.
