The insurance industry is undergoing a profound transformation driven by emerging technologies that promise to enhance efficiency, personalisation, and risk management.
In 2025, technologies such as Artificial Intelligence (AI), blockchain, the Internet of Things (IoT), and automation are reshaping how insurers operate and interact with customers.
In an interview with FAnews, Wimpie Van Der Merwe, CEO of Global Choices, shared insights on how these technologies are transforming the insurance industry and what that means for insurers and customers alike.
At the forefront
The insurance industry is on the verge of significant change, with several innovative technologies leading the charge. According to Van Der Merwe, AI and machine learning (ML) are at the forefront, driving improvements in risk assessment, underwriting, and claims processing. “AI can analyse large datasets to identify patterns that predict claims, allowing insurers to tailor their products more accurately to individual needs,” he explained.
Blockchain technology is also playing a transformative role. It offers the potential to increase transparency and trust in insurance transactions by providing an immutable ledger for policy details and claims. “Smart contracts on a blockchain can automate claims payments, reducing the time and costs associated with manual processing,” Van Der Merwe noted.
Telematics, particularly in auto insurance, is another area of transformation. By using real-time data from vehicles, insurers can assess driver behaviour and offer usage-based policies that promote safer driving habits. “Insurers can offer usage-based insurance policies, promoting safer driving habits and potentially lowering premiums based on actual driving patterns,” he added.
Insurtech startups are also revolutionising the sector. These technology-driven companies focus on consumer-centric models that streamline processes and offer innovative products. “Emerging tech-driven insurers are focusing on consumer-centric models, offering innovative products and simplified processes,” Van Der Merwe said.
Lastly, the IoT offers insurers real-time data on insured assets, such as homes and cars. This data enables dynamic pricing and proactive risk management. “Smart home devices can alert insurers to potential damages before they happen, such as burst or leaking pipes or fire risks,” Van Der Merwe pointed out.
AI and ML’s impact on underwriting and claims
Van Der Merwe emphasised the transformative potential of AI and machine learning in underwriting and claims processing. AI and ML algorithms can analyse vast amounts of data from various sources, including social media, IoT devices, and historical claims data, allowing insurers to gain a more precise understanding of risk. This leads to more accurate underwriting and tailored policies for individual risk profiles.
Automating the underwriting process is another key benefit of AI and ML. “Automated systems can rapidly evaluate applications, determine risk levels, and make policy decisions with minimal human intervention,” Van Der Merwe explained, reducing the time it takes to underwrite a policy significantly.
Fraud detection is another area where AI and ML will have a significant impact. Machine learning models can identify irregular patterns and anomalies in claims data, proactively detecting potential fraud. “This proactive detection mechanism helps reduce losses due to fraud and enhances the integrity of the claims process,” he added.
Additionally, AI-driven chatbots and virtual assistants will improve the customer experience during claims processing by providing real-time assistance, answering questions, and guiding customers through documentation requirements. “This enhances engagement and satisfaction,” Van Der Merwe said.
Blockchain’s impact on policy management and claims
Blockchain technology has the potential to dramatically improve insurance policy management, claims, and fraud prevention. By providing a unified ledger accessible by all participants, blockchain facilitates immediate verification and quicker settlements.
“By documenting every transaction on a unified ledger, all participants can access the same data, which minimises conflicts and delays,” Van Der Merwe noted. This transparency is crucial in ensuring trust and efficiency in the claims process.
Customer data for personalisation
Customer data analytics will continue to evolve, enabling insurers to offer more personalised and tailored services. Van Der Merwe highlighted the role of advanced analytics in gaining deeper insights into customer preferences, behaviour patterns, and demographics. This allows insurers to offer products that more closely match the individual needs of their customers.
Predictive modelling, powered by data analytics, will help insurers anticipate customer needs and risks more accurately. “Insurers can forecast life events or potential claims, allowing them to offer timely products or services that resonate with customers,” Van Der Merwe explained.
The use of data analytics also enables insurers to customise products and pricing models based on an individual’s unique risk profile. “By analysing customer data, insurers can create tailored coverage options and premium rates,” he said. This level of personalisation will help build stronger customer loyalty.
Compliance, innovation, and new business models
Technology advancements will play a crucial role in helping insurers comply with evolving regulatory requirements. “AI and machine learning can automate compliance checks, enabling insurers to monitor operations against changing regulations,” said Van Der Merwe. Blockchain will enhance transparency and simplify audits through smart contracts, ensuring all transactions meet regulatory standards.
However, balancing technological innovation with compliance and privacy regulations remains a significant challenge. “Insurers need to be vigilant about data privacy, ensuring transparent handling of customer data while still innovating,” Van Der Merwe noted.
Tech-driven innovations are also expected to lead to the creation of new insurance products and business models by 2026. These may include dynamic products like usage-based or on-demand policies and new models like subscription-based or parametric insurance, which pays out based on predefined parameters. “These innovations will offer greater flexibility and customer-centric options,” he added.
P2P models, insurtech, and the future of insurance
Peer-to-peer (P2P) insurance models and insurtech startups are challenging traditional insurance approaches by focusing on customer-centric, community-based risk sharing. Van Der Merwe believes these models, combined with technological innovations, will reshape the insurance landscape. “They may promote community-based risk sharing and leverage technology to enhance customer engagement,” he noted.
Despite the potential of these advancements, insurers face challenges like legacy systems, resistance to change, data security, and high implementation costs. Van Der Merwe suggests overcoming these hurdles through employee training, pilot programs, and tech firm partnerships.
As technology disrupts the industry, traditional insurers must adapt to a new competitive environment and evolving customer expectations. Van Der Merwe predicts intermediaries will focus more on advisory and risk-facilitator roles as direct-to-consumer models grow.
The insurance industry is on the verge of significant transformation, driven by emerging technologies. These innovations will improve operational efficiency, risk management, and customer experience, shaping a dynamic, customer-focused, and technology-driven future.
Writer’s Thoughts
As the insurance landscape shifts, intermediaries and brokers will play an increasingly vital role in guiding clients through a more personalised and dynamic market. Staying informed and adaptable will be key for industry players to thrive in this era of transformation. Do you agree? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts [email protected]
