Digital Insurance contacted insurance professionals to comment on life insurance trends for 2025.
Experts suggest the sector is set to experience growth this year as more insurers deploy technology to improve customer experience, underwriting and risk assessments.
Responses have been lightly edited for clarity.
Ian Drysdale, CEO of One Inc
The life insurance protection gap will close significantly.
U.S. retail life insurance premiums projected to grow by up to
This sector of the industry will undergo a major digital transformation and payments revolution, appealing to younger generations like Millennials and even Gen Z.
Bill Pieroni, CEO, ACORD
Direct life sales are likely to stall until emerging AI technologies are able to fully address the issues and opportunities.
Insurers have largely exhausted the willing market – AI will enable them to tailor solutions, messaging, and experience to reach previously 'reluctant' insureds.
Globally, existing protection gaps persist in key markets. The insurance carriers and agents to address those gaps, and service the under and uninsured, will thrive.
Brian Carey, senior director of insurance solutions, Equisoft
The life insurance space is ripe for innovation. There's no evolutionary aspect to life insurance at the moment, but it's possible that will change soon.
When a policy is issued, carriers are often focused on supporting one need. But as customers go through life, new needs pop up that they have the opportunity to help address. When that happens, carriers need to have the tech stack to help support those dynamic needs and create products that can adapt to them.
Coleman Johnson, SVP, chief underwriting officer at The Mutual Group
Life and annuity sales are up due to the healthy interest rate environment, which have also helped boost the results of carriers.
This should continue into 2025 even if the Fed cuts rates moderately.
The most successful companies will adjust their sales strategies and products to keep up with the aging population and changing social norms that are impacting the purchasing habits of younger customers.
Andrew Burge, vice president, life insurance business development, Nationwide
There will be proactive technology adoption. Traditionally reactive in embracing technological
advancements like digitization, mobile platforms, e-commerce, and AI, the life insurance
industry is seeing carriers and distributors aggressively adopt these technologies capturing greater market share and expanding the market.
The ease of doing business has become a crucial factor influencing customer choice of carriers. AI is delivering substantial benefits in labor-intensive back-office operations and is increasingly influencing areas that directly affect advisors and customers. This is improving efficiency and customer experience. Investments by both established carriers and insurtech innovators are improving user experiences for producers and consumers. These efforts are simplifying the selling and buying processes, making them more transactional and user-friendly.
There's a shift from traditional accelerated underwriting programs, which take days or weeks, to transactional experiences measured in minutes—akin to the quote-and-bind process in personal lines insurance. This advancement is extending from simple term and whole life policies to more complex permanent products. Digital self-service experiences have become essential across the entire life insurance value chain. Customers and advisors now expect simple, intuitive digital experiences in all their interactions, making it a baseline requirement for industry participants.
Ted Epps, EY Americas life insurance technology leader
In the individual life insurance market, the year ahead will be characterized by a strong focus on leveraging generative AI, consolidating platforms, creating frictionless experiences, and optimizing costs.
The adoption of Gen AI is seen as paramount. It's increasingly important to modernize data capabilities and build environments that allow carriers to leverage Gen AI for various purposes, including service enhancement, sales optimization, internal productivity, and overall operational efficiency. Though carriers are still in the experimentation stage with Gen AI and concerns around bias and discrimination with Gen AI decision-making remain, there is a clear recognition of its potential, especially in the areas of underwriting and claims processes.
Historically there hasn't been a strong business case for modernizing support services. Now the availability of fit-for-purpose solutions, such as new business engines, underwriting workbenches, and policy administration systems, is making it easier for insurers to migrate and consolidate their platforms. As more companies shift to third-party distribution channels, they are focusing on providing seamless and unified experiences across various products and services. By modernizing to create frictionless experiences, insurers can increase their agility and react quickly to market changes.
The life insurance business is inherently challenging, modernization efforts, supported by better solutions and approaches, can help insurers contain costs and drive profitable growth.
The carriers that successfully implement core modernization — intersecting product experience, operating model, platform and data — will be the ones to thrive in this highly competitive market.
Chris Morbelli, EY Americas life & group insurance leader
In the group insurance market, one of the most notable shifts going into 2025 is the generational tipping point. Millennials now make up more than 50% of the workforce. This demographic change is driving a broader focus on total well-being and a demand for products and services that cater to their preferences and engagement styles.
The emphasis on segmentation is expected to continue in the year ahead, with insurers increasingly tailoring their offerings to resonate with different workforce segments. The group market also continues to embrace a healthy modernization agenda. Historically, the group market has been quicker to modernize and invest in core technologies compared to the individual market. As a result, we're likely to see transformative changes from the adoption of generative AI and digital investments sooner in the group market.
One area where the group market still faces challenges is in creating compelling B2C interactions. However, by integrating into payroll systems and third-party administrators, insurers will be able to gain access to valuable data, which will allow them to pursue customized, GenAI-powered experiences. Integration and connectivity will be the key to unlocking the full potential of GenAI and digital investments.
By leveraging demographic shifts, segmentation, integration and connectivity, group market insurance carriers can continue to evolve and innovate in 2025.
Erik Stockwell, global insurance practice leader for life & annuities at Genpact:
For years, life and annuities (L&A) group insurers have used 'narrow AI' to predict customer behavior, health and price changes to inform underwriting decisions. However, in 2025, they will shift their focus to a previously untapped area: enrollments.
Historically, when an insurance provider onboards a large company, they rely on internal employees to manually add existing and new employees to their policies and certificates.
With AI, this manual entry becomes unnecessary, as the technology can automate enrollment, smooth the transition process and improve the overall broker and customer experience. Because of this, we'll see more insurers use 'agentic AI' to take over high-volume tasks so that their talent can focus on strategic, value-adding activities.
Rory Yates, SVP corporate strategy, global at EIS
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.
We expect the introduction of intelligent broker and advisor portals offering a more empathetic experience that deepens relationships between consumers and their advisors. This is critical.
Patrick Sullivan, SVP, integrated analytics, Munich Re Life North America:
The transformation of underwriting via technology will accelerate this year. Electronic Health Records (EHRs) have reached critical thresholds of coverage and speed of return, making them essential for life insurance underwriting. The full spectrum of AI tools – machine learning, natural language processing and Gen AI – will enable the industry to move beyond manual review of records to full automation of decisions.
The best underwriting shops will provide a superior experience for distributors and applicants by expertly managing the three steps in applying EHRs: retrieval, extraction/summarization of key underwriting attributes and the final risk assessment.
Carriers will need to find their own balance between mortality and morbidity cost, evidence cost and decision speed. At Munich Re Life U.S., we're enabling our carrier clients to deliver more accurate underwriting decisions dramatically faster through our suite of services: Clareto, EHR Summarizer and alitheia.
Marc Giguere, president and CEO of Munich Re Life U.S.
We will continue to see heightened morbidity and mortality volatility, driven by medical innovations like GLP-1 drugs and early cancer detection on the positive side, and Covid-19 and deaths of despair on the negative. This complex landscape creates both opportunities and challenges for the industry, but reinsurers are in a unique position to help carriers navigate the volatility.
We are working with carriers to closely monitor medical advancements that can refine underwriting with the goal of providing more coverage to more people.
As
I see great value in what the industry brings to society, and I'm excited about the potential to make life insurance more accessible than ever before. The products and avenues to attain them that are in development are going to shift industry dynamics, bringing the protection of life insurance to those who need it.
