- M&A activity outlook: The insurance M&A market is showing signs of recovery in 2025, driven by U.S.-based deals and broker consolidation in the UK, although overall activity remains below pre-pandemic levels. Strategic partnerships and acquisitions of tech-enabled MGAs are key areas of focus.
- Regional dynamics: The U.S. leads global insurance M&A by volume, while the Middle East is emerging as an active market due to economic diversification strategies. The UK continues to see broker consolidation amid regulatory shifts and digital transformation.
- Insurtech investment trends: Global insurtech funding stabilized at $3.2 billion in Q3 2024, with expectations to reach $4.2 billion by the end of 2025. Despite a reduction in deal count, AI-focused mega-rounds are sustaining capital inflows and reshaping innovation priorities.
- AI as a catalyst: Artificial intelligence is central to insurtech’s growth, with companies like Altana AI and Zing Health attracting significant funding. AI applications in claims automation, underwriting, and fraud detection are becoming industry standards.
- Demographic influence: With the global median age reaching 32 in 2025, insurers are adapting by developing retirement and longevity products tailored to Gen X and older millennials, who are approaching critical life stages with limited financial preparedness.
- Climate risk and regulation: Regulatory focus on climate-related financial risks is intensifying, especially in markets like the UK. Insurers are being pushed to align capital frameworks with climate exposure and enhance scenario modeling capabilities.
- Cyber insurance expansion: The cyber insurance market is projected to grow 8% in 2025, reaching $16.6 billion. Despite some slowdown in demand due to pricing volatility, persistent threat evolution and corporate awareness are sustaining growth.
- Strategic partnerships and tech integration: Insurers are increasingly forming alliances with startups and technology providers to modernize core systems, enhance distribution, and accelerate the deployment of personalized products.
- Product innovation focus: As consumer expectations evolve, insurers are investing in flexible, digitally distributed products, including usage-based and embedded insurance offerings that meet customers where they are – online and on-demand.
- Outlook and strategic shift: The insurance landscape in 2025 is defined by cautious optimism. Industry players are prioritizing digital transformation, ecosystem partnerships, and proactive risk management amid changing demographics and global uncertainties.
