5 insurtech predictions for 2025: agentic AI, MGAs and open insurance

Last year was an eventful one for the insurtech industry. We saw the rise of AI, new insurance regulation, an increased focus on ESG and shake-ups at major players.

As we move into 2025, we'll see many of these trends continue, along with a few additional ones (could it be the year of insurtech bankruptcies?).

I can't guarantee I'll have as much luck as I did with my 2024 insurtech trends and predictions, but it's set to be a pivotal year either way.

1. Agentic AI platforms: the next evolution of AI in insurance

‍If 2024 was the year that AI really began permeating the insurance industry, 2025 will be the year that agentic platforms become imperative. After all, AI is now a standard tool in 90% of insurance companies.

IBM defines agentic AI as a system that has ‘agency’ to do things beyond the data upon which it was trained, while Harvard Business Review describes it as being proactive and ‘empowered to do more on our behalf’.

We've been working hard to train AI to do what we need it to, and now it’s starting to do these things on its own. We can think of customer chatbots and virtual assistants that don’t need input from us, but now these autonomous agents will become true coworkers.

While these platforms have been around in some capacity for a while now, they will continue to get better and better, and become crucial for insurance players to integrate into their operations. 

Progressive insurance organisations are already integrating these platforms, harnessing AI’s ability to process vast amounts of data, improve internal processes, claims management and become more efficient.

In 2025, we'll see agentic platforms handle more complex tasks, working independently alongside their human coworkers as part of the same, or adjacent, teams.

As these systems evolve, the synergy between AI and human agents will redefine operational workflows and client interactions, driving the industry towards a more adaptive, efficient and customer-centric future.

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2. Employee benefits are the new blue ocean in insurance

The domain of employee benefits is experiencing a transformative shift. Workers expect more when it comes to their wellbeing and the services offered by their employers, which opens the door for new business lines for insurers and new insurtech entrants.

With the spread of embedded insurance, the move from localised offerings to comprehensive global benefits is increasingly viable, driven by advancements in technology such as open APIs and generative AI.

These tools facilitate the seamless orchestration and distribution of digital solutions, enabling insurance players to offer a range of personalised and flexible employee benefits that were once out of reach.

So whether it’s insurers investing in tech players in this space or insurtechs expanding their offerings, employee benefits is a blue ocean for value and engagement.

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‍3. Non-insurance businesses will adopt MGA models to scale embedded insurance

Non-insurance businesses are increasingly seeing embedded insurance as a strategic lever across the board from e-commerce and travel to banking and automotive.

By integrating insurance offerings directly into their products and services, they're not only making it easier for consumers to access and benefit from insurance, but they're also reaping increased revenue, customer engagement and more.

Traditional players are now copying the innovative approach of disruptive players when it comes to their embedded insurance strategy. For example, automotive OEMs striving to replicate the success of Tesla's insurance program or banks making their insurance programs as digital as fintechs.

Now, as non-insurance businesses look to capture a larger share of the insurance market, they're becoming managing general agents (MGA) themselves. Instead of acting as intermediaries simply selling insurance products, the MGA model allows them to navigate licensing, cost and revenue challenges more effectively.

We'll likely see more brands embracing the MGA model so that they gain more control over their insurance products and ensure they stay competitive in an evolving market.

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4. Mergers and acquisitions will reshape the insurtech landscape

Many insurtechs, despite generating solid revenues, struggle with profitability and growth. This environment is ripe for mergers and acquisitions, as larger insurtechs look to scale and traditional insurers seek to bolster their capabilities.

In 2025, more strategic investors will look at M&A as a means to access new insurance markets and cutting-edge technologies, enhancing their offerings in claims, distribution and underwriting. It will also be a way for them to access a more agile arm in order to focus on growth strategy, whether in D2C or B2B2C.

For some insurtechs, this trend provides a valuable opportunity to overcome current limitations, achieve economies of scale, and build more competitive and resilient operations.

By aligning with larger entities, they can benefit from increased resources and expertise, ultimately driving their growth forward. This wave of consolidation is likely to reshape the industry, fostering stronger, more innovative players who can meet the evolving demands of the market.

5. Open insurance will accelerate data sharing and innovation

‍Talks and action on open insurance will gain major momentum in 2025, fundamentally changing how data is shared and used across the industry.

Open insurance allows for greater transparency and seamless integration between various stakeholders, which means insurers can create even more innovative and digital products tailored to specific customer needs. This approach not only enhances the customer experience but also drives competition, pushing companies to continuously improve their offerings.

By adopting open standards and APIs, the industry can break down traditional silos, enabling a smoother flow of information and more efficient operations. The benefits extend beyond just operational efficiency; they also open the door for new business models and an increasingly digital sector.

As open insurance becomes the norm, companies that embrace this change will likely find themselves at the forefront of the industry, equipped to meet the evolving demands of their customers.

As we start to build the future of open insurance, it will become a big agenda item for insurers in the coming years.

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Conclusion

The insurtech landscape in 2025 is brimming with potential.

Whether it's harnessing AI and agentic platforms, focusing on employee benefits or exploring open insurance, insurtechs that jump on these trends will get ahead.

By staying agile and embracing this evolution, we can collectively shape a more dynamic and customer-centric insurance industry.