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. In my work with insurance executives across North America and Europe, I’ve witnessed an industry at a critical inflection point. The current state of insurance reminds me of the banking sector a decade ago – ripe for transformation but struggling with legacy systems and traditional mindsets. As Deloitte reports, nearly 80% of insurance CEOs believe their current business models will be unrecognizable within five years. What we’re seeing isn’t incremental change but a fundamental reimagining of risk protection, customer engagement, and value creation. Having advised multiple Fortune 500 insurance companies on their digital transformation journeys, I can confidently say that the insurance industry of tomorrow will bear little resemblance to what we know today.
Main Content: Top Three Business Challenges
Challenge 1: Legacy Technology Infrastructure and Digital Transformation Resistance
The insurance industry’s greatest anchor to the past is its reliance on decades-old legacy systems. In my consulting engagements with major insurers, I consistently encounter core systems that are 30-40 years old, creating massive integration challenges with modern technologies. As Gartner research shows, approximately 70% of insurance IT budgets are consumed by maintaining these legacy systems, leaving little room for innovation. I’ve seen firsthand how these outdated platforms create data silos, slow down claims processing, and prevent real-time customer engagement. The resistance to digital transformation isn’t just technological – it’s cultural. Many insurance leaders I’ve worked with struggle with the “if it isn’t broken, don’t fix it” mentality, failing to recognize that their business models are being disrupted by insurtech startups that operate with 90% lower operational costs.
Challenge 2: Changing Risk Landscapes and Climate-Related Disasters
The traditional actuarial models that have served insurers for centuries are becoming increasingly unreliable in our rapidly changing world. According to Swiss Re Institute, climate change and natural disasters cost the global insurance industry over $100 billion annually, and this figure is projected to rise significantly. In my strategic foresight work with reinsurance companies, I’ve observed how extreme weather events, cyber threats, and pandemic risks are creating unprecedented challenges for risk assessment and pricing. The World Economic Forum’s Global Risks Report 2023 identifies climate action failure and extreme weather as the top two global risks by severity over the next decade. Insurance companies that fail to adapt their risk models using AI and real-time data analytics will face existential threats to their underwriting profitability.
Challenge 3: Customer Experience Expectations and Digital Engagement Gaps
Today’s insurance customers expect the same seamless digital experiences they receive from Amazon, Netflix, and Uber. However, most traditional insurers are struggling to meet these expectations. As Accenture’s research reveals, 67% of insurance customers would consider switching providers for better digital capabilities. In my customer journey mapping exercises with insurance clients, I consistently find frustration points around claims processing, policy management, and communication channels. The Harvard Business Review notes that insurance ranks among the lowest industries for customer satisfaction scores, particularly among younger demographics. The gap between consumer expectations and insurer capabilities creates massive opportunities for disruption from digital-native competitors who understand that insurance isn’t just about risk transfer but about creating peace of mind through exceptional experiences.
Solutions and Innovations
The insurance industry’s transformation is being driven by several groundbreaking innovations that I’ve seen delivering remarkable results in forward-thinking organizations.
AI-Powered Underwriting and Claims Processing
AI-powered underwriting and claims processing are revolutionizing efficiency. Companies like Lemonade have demonstrated how AI can process claims in seconds rather than days, while reducing fraud detection costs by up to 80%.
IoT and Telematics
IoT and telematics are creating new paradigms for risk assessment. In my work with auto insurers implementing usage-based insurance, I’ve witnessed 40% improvements in risk prediction accuracy and 25% increases in customer retention through personalized pricing.
Blockchain Technology
Blockchain technology is solving longstanding challenges around fraud prevention and claims verification. Several European insurers I’ve advised are using blockchain for automated claims settlement, reducing processing times from weeks to minutes while eliminating fraudulent claims.
Parametric Insurance
Parametric insurance powered by smart contracts is transforming how we handle climate-related risks. Instead of traditional claims processes, these policies automatically trigger payments when specific conditions are met, such as hurricane wind speeds or earthquake magnitudes.
Embedded Insurance
Finally, the emergence of embedded insurance represents perhaps the most significant shift. As PwC’s research indicates, embedded insurance could capture up to $700 billion in premium volume by 2030. I’m working with several organizations to integrate insurance offerings directly into customer purchase journeys – whether it’s flight insurance during airline ticket purchases or appliance protection during e-commerce transactions.
The Future: Projections and Forecasts
Looking ahead to 2035, the insurance landscape will undergo transformations that today seem like science fiction but are already in early development stages. According to IDC projections, global spending on AI in insurance will grow from $1.5 billion in 2023 to over $8 billion by 2026, driving massive efficiency gains and new product development.
2024-2027: Digital Infrastructure and AI Integration
- $7.5T global insurance premiums by 2025 (McKinsey)
- 70% IT budgets consumed by legacy systems creating innovation barriers (Gartner)
- $100B annual climate-related costs requiring new risk models (Swiss Re)
- 67% customers considering switching for better digital capabilities (Accenture)
2028-2032: Autonomous Processing and Embedded Insurance
- $8B AI spending in insurance by 2026 (IDC)
- $700B embedded insurance market by 2030 (PwC)
- Autonomous claims processing becoming industry standard
- Traditional insurers losing market share to digital-first competitors
2033-2035: Quantum Computing and Personalized Micro-Insurance
- $1.1T value creation through digital transformation (McKinsey)
- Quantum computing enabling complex risk modeling in minutes
- Personalized micro-insurance products dominating market
- Policies dynamically adjusting based on real-time behavior data
2035+: Proactive Risk Prevention Partners
- Insurance evolving from reactive risk-transfer to proactive risk-prevention
- “Health assurance” replacing traditional health insurance models
- Traditional boundaries between insurers, tech companies, and healthcare providers blurring
- Complete reimagining of security and peace of mind creation
Final Take: 10-Year Outlook
Over the next decade, insurance will evolve from a reactive risk-transfer mechanism to a proactive risk-prevention partner. The most successful insurers will be those who leverage data and AI not just to price risk accurately but to help customers avoid losses altogether. We’ll see the emergence of “health assurance” rather than health insurance, where providers actively work to keep policyholders healthy through personalized recommendations and early intervention. The traditional boundaries between insurers, technology companies, and healthcare providers will blur, creating new ecosystems of value. The companies that thrive will be those viewing digital transformation not as a cost center but as the core of their value proposition.
Ian Khan’s Closing
The future of insurance isn’t about incremental improvements to existing models – it’s about fundamentally reimagining how we create security and peace of mind in an increasingly complex world. As I often tell insurance executives in my keynote presentations: “The greatest risk in insurance today isn’t in your portfolio – it’s in your reluctance to transform.”
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.
