2024 was a turbulent year for the insurance industry, characterized by inflation, a devastating series of natural disasters, and increasingly advanced, sometimes creative, fraudulent tactics. Despite these challenges, the year also brought new opportunities through technological advancements and initial steps toward digital transformation and successful AI adoption.
As we look ahead to 2025, I believe three major trends will continue to shape the sector's trajectory: effective, more practical implementation of AI, the adoption of aggressive fraud detection tools, and greater collaboration among carriers.
AI implementation will focus on practical realities
2024 saw professionals, regardless of industry, push the envelope on AI integration, seeking to identify the areas with the most significant potential value. Now, 2025 will be about scaling the AI pipe dreams back and instead using it to automate everyday tasks. The insurance industry, a sector that’s historically been held prisoner to manual and time-consuming processes, is poised to benefit greatly from this approach. While 77% of insurance companies tried to make up for past hesitancies by launching themselves onto the AI hype bandwagon in 2024, only 5% are currently set to reap tangible benefits due to prioritizing speed and scalability over strategic implementation.
In 2025, the most successful AI strategies will be those that embrace a more balanced and deliberate approach, focusing on areas of the business that deliver the highest ROI. For insurers, this involves automating manual, time-intensive tasks while keeping a human in the loop for larger decision-making tasks. One area where AI implementation can deliver significant benefits is in monitoring claimants' online activity. Instead of relying on overburdened adjusters to conduct labor-intensive searches manually, AI can perform the same task in seconds, saving adjusters a minimum of 15 minutes per claim. Once AI flags any suspicious or concerning activity, adjusters can then simply review and approve it, saving time, improving accuracy, and ensuring honest policyholders receive the prompt payouts they deserve.
Successful AI adoption isn’t about being the most innovative; it’s about being innovative in the right ways. Insurers need to be thoughtful when implementing AI across their business, ensuring they’re balancing moving the innovation needle forward with realistic business value.
See also: 10 Tech Breakthroughs Likely in 2025
Fraud in the spotlight
Insurance fraud, already a $300 billion problem (equivalent to 10 Hurricane Helene-sized disasters occurring every year), is set to worsen in 2025. Drivers include a staggering 30% of people under 45 who don’t view insurance fraud as a crime (equating to approximately 50 million Americans), combined with a sharp rise in exaggerated claims, often exacerbated by attorneys who prioritize maximizing settlements for their own benefit rather than acting in the claimant's best interest. While deepfakes and AI-generated fraud tend to occupy the spotlight, most fraud occurring today stems from neglecting the basics and relying on little to no tools beyond an investigator’s intuition.
In 2025, carriers will be required to take more proactive, data-driven measures to combat the growing fraud epidemic, as current methods remain largely ineffective. We’ll see the most successful insurers leverage tools that automate the review of open injury claims, compiling real-time, evidence-based data to inform their decision-making and streamline the time-consuming tasks that are stopping them from finding fraud in real time.
See also: Insurance Industry Faces Major Changes in 2025
Carriers band together in the fight against fraud
While leveraging fraud detection tools is a critical aspect of combating fraud, it will still take more to flatten the curve. A key focus for Carpe Data in 2025 is finding ways for carriers to collaborate and share data in a more meaningful way – what we’re calling “the network effect.” By sharing critical intelligence, patterns and data, insurers can more effectively identify and disrupt organized fraudulent activity that has exploited gaps in an individual carrier’s defense. The idea is that insurers become part of a trusted partner exchange where they have access to previously generated alerts or information on policyholders that have been run through the system. The result is alerts on suspicious activity being shared more promptly and increased access to historical injury information so we’re able to provide better care recommendations and facilitate fairer claims settlements.
In 2025, I’m optimistic that insurers will prioritize shared success over competition, ultimately lowering costs for consumers and delivering greater value across the industry.
