Major Insurtech Trends: AI, Personalization, Automation

The global insurance sector is undergoing a seismic shift. As customer expectations evolve and digital technologies mature, insurtech companies are leading the charge in transforming how insurance is designed, delivered, and experienced.

At the heart of this revolution are three powerful forces: Artificial Intelligence (AI), hyper-personalization, and automation. These trends are not just buzzwords, they are redefining the insurance landscape in 2025 and beyond.

AI takes over risk assessment and claims processing

Artificial intelligence is becoming a core enabler for smarter, faster, and more scalable insurance operations. Insurtechs are using AI to:

• Analyze real-time customer data to generate more accurate risk profiles

• Detect fraudulent claims through pattern recognition and anomaly detection

• Automate underwriting with machine learning models trained on massive datasets

• Power chatbots that handle routine claims and customer service with minimal human intervention

By 2025, AI will no longer be a “nice-to-have”, it will be a competitive necessity for both startups and incumbents.

Hyper-personalization is the new standard

The age of one-size-fits-all insurance products is over. Today’s consumers expect coverage tailored to their lifestyle, behavior, and needs - and insurtechs are delivering.

Using data from connected devices, social platforms, wearables, and spending habits, insurtech platforms can:

• Offer usage-based insurance (e.g., pay-as-you-drive car insurance)

• Tailor recommendations in real time, such as micro-policies for short-term travel or freelance work

• Adapt coverage dynamically as a customer’s circumstances evolve

This level of personalization leads to higher customer retention, lower churn, and better alignment between risk and premium.

Automation streamlines the entire insurance lifecycle

Insurtechs are pushing automation across the board, from customer onboarding to claims disbursement. Key developments include:

• Instant quotes generated by digital platforms using AI-powered rules engines

• Self-service portals where users can buy, manage, and renew policies online

• Automated claims payouts, sometimes settled within minutes using smart contracts or pre-validated data

Automation reduces operational costs, eliminates friction, and frees up human agents to focus on high-value interactions.

Embedded insurance gains ground

Closely tied to automation is the rise of embedded insurance; coverage seamlessly offered at the point of need, integrated into platforms like e-commerce checkouts, car rental apps, or fintech services.

This trend is set to reshape distribution models, enabling insurtechs to reach customers who may never have actively sought out a policy.

Data-driven innovation fuels inclusive growth

With AI and automation unlocking new types of data, insurtechs can serve previously “uninsurable” populations, especially in emerging markets. Behavioral data and alternative credit scoring models are helping design inclusive insurance products for gig workers, rural communities, or informal sectors.

This shift represents not only a business opportunity but also a social innovation frontier.

Conclusion: Insurtech is redefining the rules of the game

As we move further into 2025, the most successful insurtechs will be those that blend AI intelligence, customer-centric personalization, and end-to-end automation into a seamless experience.

Traditional insurers that fail to adapt will struggle to stay relevant, while agile, tech-savvy players will set the standard for what modern insurance looks like: proactive, digital-first, and deeply human in impact.

Predictive Insurance Through AI: Myth or Reality?

Methodology: Exploring AI’s Role in Insurance Forecasting

This article draws on industry reports, case studies, and current use cases from insurers applying artificial intelligence to predictive modeling. It examines how AI is reshaping underwriting, claims management, and customer engagement and where the promise may be ahead of the current reality.

In Brief: Where We Stand Today

• AI is already delivering predictive insights in claims detection, risk scoring, and fraud prevention.

• Adoption remains uneven, with most impact in large carriers and insurtech startups.

• Challenges include data privacy concerns, regulatory hurdles, and model transparency.

• The future of predictive insurance lies in combining AI with human judgment and ethical frameworks.

How AI Is Changing Insurance Predictions

The idea of predictive insurance is no longer science fiction. With vast amounts of customer data, real-time IoT inputs (such as from vehicles or smart homes), and advanced machine learning models, insurers can now:

• Identify high-risk customers or properties proactively

• Anticipate claim likelihood based on behavioral and environmental factors

• Tailor pricing more accurately for individual policyholders

• Detect fraud before payouts are made

AI models can process data at a scale and speed that human teams simply can’t match, making predictive insurance a growing reality in modern underwriting.

The Challenges That Make It Feel Like a Myth

Despite these advancements, predictive insurance powered by AI isn’t universal yet. Key challenges include:

Data Quality and Access

Insurers need clean, consistent, and ethically sourced data. Many legacy systems were not built for this level of data integration, slowing adoption.

Regulatory Landscape

Predictive pricing and claims forecasting raise complex compliance questions. Regulators demand transparency on how models make decisions, particularly in sensitive areas like health or auto insurance.

Trust and Transparency

Consumers and sometimes underwriters want to understand why a price or decision was made. AI models can feel like a “black box,” making it harder to build trust without proper explainability measures.

Where AI Predictive Models Are Already Delivering

Despite these challenges, AI-driven prediction is already reshaping certain insurance segments: 

• Auto insurance: Predictive telematics models score driver safety in real time, impacting pricing.

• Property insurance: Climate and weather models anticipate loss patterns to adjust coverage proactively.

• Health insurance: Behavioral data informs wellness incentives and early intervention programs.

• Fraud detection: AI flags anomalies faster than traditional methods, cutting loss ratios.

These are no longer pilot projects; they're live tools helping insurers reduce costs, improve customer experience, and drive smarter decisions.

Final Thought: Myth or Reality? A Bit of Both For Now

Predictive insurance through AI is very real but it’s not evenly applied across the industry. For many carriers, true AI-driven prediction is still aspirational, hampered by legacy infrastructure, governance complexity, and talent gaps.

However, where AI is deployed well, it’s transforming how risk is assessed, priced, and managed. The future will belong to insurers who combine AI’s predictive power with human insight, transparency, and a focus on ethical impact.

Les tendances Insurtech à suivre en 2025

Le secteur de l’assurance vit une transformation profonde portée par la technologie. En 2025, les insurtechs ne se contenteront plus de numériser les processus existants : elles réinventeront l’ensemble de la chaîne de valeur, de la souscription à la gestion des sinistres.

Voici les 6 grandes tendances à surveiller pour comprendre où va l’innovation dans l’assurance.

1. L’intelligence artificielle devient le moteur principal de l’automatisation

L’IA est désormais au cœur des modèles insurtech. En 2025, elle sera utilisée à toutes les étapes : évaluation des risques, détection de fraude, gestion des sinistres, tarification dynamique.

Par exemple, AXA France a développé, avec Microsoft, une plateforme interne baptisée AXA Secure GPT. Basée sur l’IA générative, elle permet d’ajuster les offres aux antécédents médicaux ou au mode de vie : services de prévention personnalisés ou offres santé ciblées.

De leur côté, des startups comme Shift Technology utilisent l’IA pour détecter des fraudes en analysant des millions de transactions.

Les assistants conversationnels intelligents réduisent aussi les délais de traitement, offrent un support 24h/24, et améliorent l’expérience client de bout en bout.

2. L’assurance embarquée s’impose comme nouveau standard

L’assurance ne se vend plus, elle s’intègre. En 2025, le modèle de l’assurance embarquée ("embedded insurance") devient la norme, proposée automatiquement au bon moment — lors de l’achat d’un téléphone, d’un voyage ou d’un service.

Exemples notables :

• AppleCare propose une couverture dès l’achat d’un appareil Apple.

• Booking.com intègre des options d’assurance voyage au moment du paiement.

• Stripe propose aux commerçants d’offrir une assurance à leurs clients via son API.

Cette intégration contextuelle permet d’atteindre des clients qui n’auraient pas souscrit à une assurance classique.

3. Des modèles d’abonnement plus flexibles pour répondre aux nouveaux usages

Avec l’évolution des modes de vie (freelance, mobilité, économie à la demande), les clients attendent plus de flexibilité. En 2025, les insurtechs proposent des formules à la carte ou par abonnement, facilement activables ou désactivables via une app.

La startup française Luko permet par exemple de suspendre son assurance habitation quand on est en déplacement prolongé.

Ces offres s’inspirent des standards de consommation modernes (Netflix, Spotify), et séduisent particulièrement les générations Z et milléniales.

4. Une assurance plus inclusive, portée par la donnée alternative

Les données alternatives issues des objets connectés, réseaux sociaux ou plateformes de mobilité ouvrent de nouvelles perspectives.

La startup Pula, active en Afrique, utilise les données météo et agricoles satellitaires pour assurer les petits agriculteurs, jusque-là exclus des produits classiques.

Autre exemple : Zego, au Royaume-Uni, propose des assurances flexibles pour les livreurs ou chauffeurs VTC, en s’appuyant sur des données d’usage en temps réel (heures de conduite, distance parcourue).

Ces modèles permettent une inclusion assurantielle plus large, notamment dans les économies émergentes.

5. Un écosystème de partenariats plus stratégique

Les insurtechs ne visent plus à remplacer les assureurs traditionnels, mais à collaborer avec eux. En 2025, les partenariats stratégiques deviennent un levier clé : startups agiles + acteurs établis + géants technologiques.

Par exemple :

• Swiss Re collabore avec des insurtechs pour co-développer des produits.

• Generali noue des alliances avec des acteurs de la healthtech pour enrichir ses offres santé.

• Des acteurs cloud comme AWS ou Azure fournissent l’infrastructure sécurisée des nouvelles plateformes insurtech.

Ces synergies favorisent l’innovation tout en garantissant la solidité réglementaire et financière.

6. La blockchain gagne du terrain dans la gestion des sinistres

En matière de transparence et d’automatisation, la blockchain apporte des solutions puissantes.

Des startups comme Etherisc ou Chainlink expérimentent les smart contracts pour des assurances paramétriques : retard de vol, aléa météo, hospitalisation… L’indemnisation est automatique dès qu’un événement validé est détecté.

Bien que cette technologie reste marginale, elle se développe notamment dans les micro-assurances et les marchés émergents, où la rapidité et la confiance sont essentielles.

Conclusion : une assurance plus intégrée, intelligente et centrée sur l’utilisateur

En 2025, les insurtechs redéfinissent les règles du jeu. IA, personnalisation, intégration fluide, inclusion… l’assurance devient proactive, flexible et contextuelle.

Les compagnies traditionnelles devront s’adapter à ces standards ou risquer de perdre en compétitivité. Car plus que la technologie elle-même, c’est l’expérience utilisateur qui devient le nouvel avantage concurrentiel.

How is AI reshaping InsurTech ?

AI unlocks unprecedented underwriting value through non-traditional data processing, while simultaneously enabling substantial margin improvements via automated claims handling and fraud detection. Furthermore, behavioral prediction engines dramatically reduce acquisition costs, just as sector-specific applications improve loss ratios and create new premium pools. Finally, dynamic pricing optimization delivers defensible advantages through improved ratios and conversion rates.

Our methodology involved gathering numerous venture maps from around the world to identify recurring categories and sources of innovation in AI. From this extensive research, we developed the Mandalore AI in InsurTech Venture Map 2025, which captures the current state of the art in AI technology and innovation. Using these insights, we analyzed how innovation is driven across different sectors and crafted this article to highlight the key trends and opportunities shaping the future of AI.

AI unlocks unprecedented underwriting value through non-traditional data processing

The most promising AI investments in underwriting target the opportunity in reducing mispriced risk. Algorithms now process thousands of non-traditional variables that traditional actuarial models miss completely. The emerging gold rush is in proprietary data acquisition strategies that feed these models with unique signals beyond standard industry datasets. We're particularly bullish on computer vision applications that can extract property characteristics remotely, eliminating the need for costly physical inspections while dramatically improving accuracy of risk assessment.

While enabling margin improvements via automated claims handling and fraud detection

Claims processing represents perhaps the largest near-term ROI opportunity in insurtech, with potential margin improvements through AI automation. The value creation formula is straightforward: each percentage point of fraud detection improvement could translate to annual savings industry-wide. We see immediate traction for solutions combining computer vision for damage assessment with natural language processing for claims documentation analysis. The most investable opportunities are emerging at the intersection of these technologies, where end-to-end claims automation platforms can deliver increasing processing rates.

Behavioral prediction engines dramatically reduce acquisition costs

With customer acquisition costs in insurance being high, AI-powered distribution efficiency represents a massive opportunity. The most compelling investment cases are platforms that leverage behavioral prediction engines to identify high-conversion prospects before competitors. The next frontier will be conversational AI that can handle complex insurance consultations with human-like understanding of coverage nuances, effectively democratizing expert-level insurance guidance.

Just as sector-specific applications improve loss ratios and create new premium pools

Sector-specific AI applications are producing the fastest path to market leadership. In auto insurance, companies deploying telematics with behavioral analysis algorithms are decreasing loss ratios below industry averages. Life insurers leveraging continuous underwriting models through wearable data are expanding their addressable market by making coverage accessible to previously uninsurable populations. The cyber insurance sector presents the most asymmetric return profile, where AI that can quantify previously unmodeled risks creates entirely new premium pools..

Finally, dynamic pricing optimization delivers defensible advantages

AI-driven pricing represents the most defensible competitive advantage in insurance. The investment opportunity lies in platforms that balance pricing optimization with regulatory compliance through explainable AI. Dynamic pricing engines that can continuously adjust to market conditions without human intervention are a big opportunity. The next wave of innovation will come from causal inference algorithms that simulate customer responses to price changes, allowing insurers to optimize elasticity at the individual level.

Why Traditional Insurance Companies Should Embrace Venture Studios: Insights from Mandalore Partners

The insurance industry, traditionally characterized by caution and risk aversion, is facing unprecedented challenges from technological advancements and changing consumer expectations. To remain competitive, insurance companies must innovate—and venture studios offer a compelling pathway.​

The Need for Innovation in Insurance

Emerging technologies, such as artificial intelligence and blockchain, are disrupting traditional insurance models. Consumers now demand personalized, digital-first experiences, and new entrants are capitalizing on these trends. To keep pace, insurers must explore innovative solutions.​

Mandalore Partners provides a Venture Capital-as-a-Service (VCaaS) model that enables insurance companies to incubate startups focused on insurtech solutions. This approach allows insurers to experiment with new products and distribution channels without disrupting core operations.​

Real-World Applications: Success Stories

Several insurance companies have successfully engaged with venture studios:​

• AmFam Ventures: Developed by American Family Insurance, this venture studio focuses on insurtech innovations, providing both minority investments and majority ownership in startups to better serve stakeholders.

• ARK Venture Studio: Combining a venture studio, think tank, and venture fund, ARK builds insurance-enabled businesses to tackle systemic risks to people and the planet.

Strategic Advantages for Insurers

Engaging with a venture studio offers multiple benefits:​

• Accelerated Innovation: Rapid development of new products and services.​

• Risk Management: Controlled experimentation minimizes potential disruptions.

• New Revenue Streams: Venture studios allow exploration of adjacent business models.

• Future-Proofing: Adapting to tech shifts before they become industry standards.

For insurers looking to thrive in a fast-evolving landscape, venture studios represent not just a trend—but a strategic imperative.

Secondary Markets Amidst Decreased Insurtech Funding

The Rise of Secondary Markets Amidst Decreased Insurtech Funding

The Insurtech sector, once a magnet for venture capital (VC) funding due to its potential to revolutionize the insurance industry, has recently experienced a significant slowdown in new investments. Economic uncertainties and a more cautious investor mindset have contributed to this decline in primary market activity. As a result, secondary markets—where stakeholders can trade existing shares of private Insurtech companies—have become increasingly important. These markets now serve as a critical source of liquidity for investors and employees, especially as securing new funding rounds becomes more challenging.

A Shift in Insurtech Investment Dynamics

The Insurtech industry, known for its innovation in streamlining and digitizing traditional insurance services, has been notably affected by the broader economic downturn. According to Fintech Global, funding for Insurtech companies in the U.S. dropped by 67% year-over-year, reflecting a shift from growth-oriented investments to a focus on profitability. This change in investment strategy has left many Insurtech firms struggling to raise new capital. In this environment, secondary markets have emerged as a vital alternative, providing a means for stakeholders to realize value from their investments when primary market opportunities are scarce.

With companies staying private longer and facing challenges in attracting new capital, secondary transactions offer a crucial lifeline. Early investors and employees can turn to these markets for liquidity, as traditional funding rounds become more difficult to secure. This trend is supported by BCG, which notes that the Insurtech hot streak has cooled, underscoring the necessity of alternative liquidity solutions.

Secondary Markets as a Response to Funding Challenges

The slowdown in Insurtech funding has led to significant discounts in secondary market valuations. According to Insurance Business Magazine, many Insurtech companies are trading at valuations up to 40% lower than their last funding rounds. This reflects the broader challenges these companies face in securing new capital. Despite these discounts, investor interest in secondary Insurtech shares remains strong, driven by the potential for long-term gains once market conditions improve.

Secondary markets provide investors with a more affordable entry point into the Insurtech sector, which continues to be seen as a high-risk, high-reward industry. The attractiveness of these markets is heightened by the correction in primary market valuations from their previous highs. For Insurtech companies, engaging in secondary market transactions not only helps sustain investor interest but also provides much-needed liquidity to employees holding stock options, which might otherwise be difficult to monetize. Insights from Tenity reinforce the role of secondary markets in offering liquidity solutions amidst a challenging funding environment.

Looking Ahead: The Future of Insurtech Secondary Markets

As the Insurtech industry continues to navigate through a period of reduced funding, secondary markets are expected to play an increasingly critical role. The anticipated recovery of the IPO market could provide better pricing benchmarks, potentially stabilizing valuations and making secondary investments more appealing. However, until that recovery materializes, secondary markets will remain a key mechanism for liquidity in the Insurtech sector.

Moreover, as Insurtech companies mature and look for ways to sustain growth without relying solely on new VC rounds, secondary markets will provide a necessary outlet for early investors and employees to capitalize on their holdings. This trend is likely to persist, particularly as Insurtech continues to attract attention for its innovative potential and the ongoing digital transformation of the insurance industry. Insurance Times, highlights that while funding has plummeted, secondary markets are stepping in to offer much-needed support and liquidity.

In conclusion, the decline in Insurtech funding has underscored the growing importance of secondary markets as a vital tool for liquidity and investment. As the Insurtech industry adapts to new financial realities, secondary markets are poised to remain central to its continued growth and evolution.

Sources:

1. Funding for Insurtech companies in US dropped by 67% YoY as investors pull back - Fintech Global

2. Insurtech’s Hot Streak Has Ended. What’s Next? - BCG

3. Global Insurtech funding falls below $1 billion in Q1 2024 - Insurance Business Magazine

4. Insurtech funding: The state of Insurtech in 2024 - Tenity

5. US Insurtech investment activity in freefall as funding declined 78% YoY - FinTech Global

6. Insurtech funding plummets in Q1 2024 - Insurance Times