What are the challenges facing the insurance profession as the New Year unfolds – and where are there opportunities for the market to demonstrate its importance in 2025?
These were among the questions put to brokers, insurers, MGAs and associations from across the sector – with responses underscoring the complexity of today’s risk environment. Offering his insights, Matthew Hill (pictured left), CEO of the Chartered Insurance Institute (CII), noted that the CII’s Public Trust Index data reveals that improving customer service is probably the biggest challenge for 2025.
That’s especially true in relation to how claims and complaints are handled, he said, as well as ensuring fair pricing of products for all customers. Meanwhile, the wider adoption of AI – which is bringing positives, but also risks – will also continue to be under the spotlight. For Mark McIlquham (pictured centre), CEO UK at Acrisure, the main challenge he sees is a lack of differentiation. “There are so many consolidators, so many insurers, but very few are genuinely able to stand out from the crowd.
“Most brokers are fortunate to have a certain number of loyal clients, but it is only those who are able to offer something legitimately different that grow.”
Adding his perspective, Jon Walker (pictured right), CEO of AXA Commercial, highlighted how the transition to a soft market will provide challenges into 2025 as insurers and brokers execute their plans recognising that less growth will be available from pricing changes. “As such, there will be more focus on generating true underlying growth,” he said. “I am confident that customers and brokers will appreciate our continued consistent approach – we haven’t dipped in and out of lines of business so they know they can rely on us for the long term.”
Government policy could also provide the market with challenges and opportunities, he said. “We’re launching a new report in early 2025 on battery health certificates for electric vehicles and we look forward to engaging with the government following a commitment to support standardised battery information in Labour’s election manifesto. We believe this is crucial to stimulate the second-hand market as there’s currently no benchmark for the value of a vehicle.”
Walker also expects climate change to continue to be a challenge and emphasised that the industry needs to find ways to support customers as they navigate its impacts.
For McIlquham, the motor market represents an enormous opportunity for a new entrant to come in and make a genuine impact. There has been an enormous amount of heat on rate increases, premium finance sell-out rates and a general lack of transparency in what is a very high-volume market. “Done right, and especially with the introduction of telematics, it wouldn’t surprise me to see a major player emerge in the motor space next year – I am talking predominantly about commercial motor but there is no reason why we can’t see a breakout in the personal lines market too.”
For Hill and his team at the CII, there’s real opportunity to be found in the cyber and intellectual property insurance segments. These have not traditionally been core products, he said, mainly because the profession has tended to focus on tangible assets, like transportation, cars and buildings.
“Insurers will increasingly need to find approaches to providing cover that meet the very different needs of these customers,” he said. “In general, insurers will need to think more holistically about the package of financial and non-financial redress they offer. For example, there may be demand for expert counselling for employees of firms who are victims of online piracy, as much as for compensation for any monetary losses incurred.”
Looking to the New Year, Hill noted that insurance will continue to evolve in 2025, just as it has done over many decades before. The challenge is always to ensure the widest possible societal coverage by building and maintaining trust. For the CII, he said that means ensuring professionals behave ethically and provide products and services that inspire confidence. “We look forward to contributing to achieving those ends through the work we do with practitioners and stakeholders across a broad range of areas.”
Walker shared that he feels “incredibly positive” about the insurance industry’s ability to demonstrate its effectiveness and importance in 2025. Risks are becoming increasingly interconnected, he said, and insurance plays a crucial role in protecting what matters to people most.
“For businesses, having the right insurance can be the difference between success and failure if the unexpected happens,” he said. “We’ve seen some incredible initiatives in the past few years in our AXA Startup Angel competition, from adaptive clothing for people with disabilities to a reward scheme for blood donors, so we can’t wait to see what businesses this year’s entrants have been developing.”
McIlquham also expressed great confidence in the industry going forward, in large part because it has never been so relevant - with the natural disasters, pandemics, global conflicts and underinsurance seen in recent times illustrating the need for insurance like never before. “It’s probably for this reason that insurance has emerged as a genuinely exciting career pathway for the younger generation.”
