Global Insurance Platform Provider Offers Outlook for Year Ahead

San Francisco, CA, November 19, 2024: Leading SaaS core platform provider to the insurance market, EIS, has released its 2025 forecast for the industry. Following a year marked by pervasive cost pressures, EIS anticipates that market viability and sustainability will be a critical focus next year. As insurers continue to grapple with legacy system constraints and shifting consumer expectations, EIS expects new data-driven business models to emerge that will enhance customer outcomes and drive revenue growth.

 “Inflationary pressures will subside in 2025, bringing long-standing challenges including market viability, plunging customer satisfaction scores, and coverage gaps, back into sharp focus,” says Rory Yates, SVP Corporate Strategy, Global at EIS. “The insurers who actively build adaptivity and intelligence into their models, while leveraging data-driven insights and consumer-centric approaches will find the greatest success, and ultimately reshape the industry.”

 Below are the key trends and imperatives that EIS believes will drive the insurance sector in 2025:

1. Beyond the headline-grabbing extreme weather-driven disasters across the globe, quieter but equally disruptive trends will emerge in 2025.

• Subsidence claims in drought-prone areas are now outpacing flood claims in the UK. Severe storms have hit California and Florida repeatedly. These environmental impacts are becoming increasingly diverse and global. With limited options, we can expect more insurers to exit vulnerable markets when really they should be adapting instead.

Imperative: Insurers must exhaust all avenues and efforts for solving the weather problems they are facing before playing the viability card. This includes, proactively engaging customers in data-led risk mitigation, intelligent modeling, government partnerships, and deeper customer engagement.

2. While premium increases in property insurance are expected to remain moderate in 2025, long-standing issues will persist.

• Without greater support and engagement from insurers, consumers will continue to face underinsurance at the point of claim, and preventable risks like water damage will go unchecked. In parallel, rising churn rates are nearing a tipping point, and will push insurers to rethink coverage delivery and customer engagement. 

Imperative: Home insurance should be viewed as a gateway product. Securing a customer’s home should mark a pivotal relationship moment, unlocking opportunities for both customer loyalty and insurer value. The future lies in active insurance – a data-driven relationship that delivers value through hyper-personalized advice and smart cross-selling.

3. Auto insurance pricing should begin to stabilize, with potential reductions as inflationary pressures ease.

• At the same time, the ongoing challenge of long-term viability will drive renewed focus on what a truly transformed car insurance product looks like. We believe the future lies in solutions that are risk-mitigating, embedded, and adaptive, particularly for multi-use scenarios.

Imperative: 2025 should see a strong emphasis on enhancing the customer experience and developing data-fluid ecosystems that streamline the entire process, from quote to claim. Thus making it more efficient, customer-friendly, and geared towards self-service.

4. Proliferated distribution has quickly devolved into a race-to-the-bottom and created even greater focus on price – a dynamic that’s poised for a shake-up in 2025.

• The key to success will be refocusing the industry on advisory value, deeper customer relationships, and differentiated offerings that bring insurers and customers closer together.
• With investment moving into customer & advisor portals and other services, this is vital in what we call embracing the trialogue (insurer, advisor, and customer).

Imperative: The imperative for this is clear. Insurers who can build flexible, intelligent distribution models will capture a clear advantage. To do this, enhanced communication capabilities that support these types of dynamic relationship-based ecosystems are critical.

5. Life and Health have significant potential to address the coverage gaps we are currently seeing, and with the right foundations, could be a major revenue driver in 2025.

• In 2025 millennials will make up 75% of the workforce, and while the traditional trigger points for life & health insurance are fading, they will still need protection for their income and valuables (out of home). 
• Embedding insurance in various consumer touchpoints, will see improved accessibility, and provide personalized customer journeys across all channels (direct-to-consumer, brokers, aggregators, etc.). 

Imperative: The path to growth lies in adopting embedded insurance models and integrating into broader ecosystems. Financial institutions in the credit protection space, in particular, are set to lead in delivering these solutions to the market.

6. 2025 will be a pivotal year for life insurers as the sector grapples with transformation challenges on multiple fronts.

• Legacy systems will reach end of life, forcing insurers back into the technology market. In parallel, shifting demographics are deprioritizing life & health, at a time when the sector faces an urgent need to reverse its structural decline.
• Alongside this, we will see life insurers reinvent their business models on new technology, creating customer-centered and relationship-based businesses capable of diverse product-based models.

Imperative: We expect the introduction of intelligent broker & advisor portals offering a more empathetic experience that deepens relationships between consumers and their advisors. This is critical. As highlighted in the recent Capgemini report, customer experience is a key differentiator, and insurers that excel in this area will outperform those that don’t.

7. Artificial Ignorance will still be rife as we all battle through the hyperbole in search of viable AI use cases and ways to make them a reality.

• Machine learning (ML) will remain crucial in 2025. But, despite the inevitable buzz, GenAI won’t make as significant an impact as we might envisage. 
• On one hand, ML and automation can handle the same tasks more cost-effectively, on the other, large, open language models simply aren’t that easy to harness for most insurers. 
• For those without strong data foundations, applying these outcomes to processes and customer/employee experiences presents unacceptable risks.

Imperative: The potential of GenAI is clear. It can play a transformative role wherever we choose to let it. But that’s not the real challenge. The question is whether it can be done responsibly, accurately, securely, and affordably. We’ve got to move away from the theoretical value of utilizing GenAI to focusing on how to make it possible. The two are currently miles apart.

About EIS

EIS is a leading SaaS platform provider to the insurance industry and first choice for ambitious insurers building the customer-centric insurance ecosystems of tomorrow. Our open, API-rich, event-driven architecture enables insurers to break free from inefficient, inflexible legacy systems and siloed organizational design, and enter a world where technology enables organizational excellence and world-class customer service. 

Digital by design, EIS delivers the flexibility and agility needed to meet the dynamic demands of today’s modern insurance market, with the built-in adaptivity to orchestrate the transformations of the future. Our cloud-native platform liberates insurers to enter new markets, develop new products, and build engaging experiences, while eliminating unnecessary costs, boosting retention, and delivering the self-sufficiency to accelerate your path to innovation, automation, and growth.

Headquartered in San Francisco, EIS is at the core of some of today’s most ambitious insurers. For more information, visit www.eisgroup.com.