November 2024: 2025 predictions

No matter the industry, businesses everywhere are experiencing a time of unprecedented transformation as we approach 2025. Traditional models are being reshaped by technological innovation, shifting customer expectations, and evolving risk landscapes. This transformation isn’t just about adopting new technologies—it’s about fundamentally reimagining how products and services are designed, distributed, and managed in an increasingly digital world.

As with other businesses, the insurance industry is also evolving rapidly to adapt to the future. Companies that succeed will be those that can balance innovation with stability, automation with human expertise, and growth with sustainable operations.

Let’s get into it.

What’s going on?
Insurance predictions
Business risk predictions
Policy predictions
What’s new from Embroker

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What’s going on?

Global Insurance Report 2025 — McKinsey | McKinsey’s 2025 Global Insurance Report offers great insights into specific policy predictions, overall market trends, and more.

2025 Market Outlook — Business Insider | See what stock and business markets have to look forward to and the hurdles many are facing as we enter 2025. Business Insider has all the details… behind a paywall.

2024 Cyber Risk Index Report — Embroker | Our 2024 Cyber Risk Index Report is here. See why founders are opting for policy packages, the non-coverage value cyber brings to businesses, and more.

Understanding today’s interconnected risks

One of the most significant developments in the risk landscape is the increasing interconnection between environmental and cyber threats. This is creating new challenges that require innovative approaches to risk assessment and management:

Climate change impacts are manifesting in tangible ways across coastal areas, riverways, and regions prone to wildfires
Cyber threats are now being assessed as more probable than natural disasters in many cases
Businesses must develop integrated strategies that address both physical and digital vulnerabilities
The digitalization of business operations means cyber threats now have direct, material impacts on day-to-day operations

Coverage patterns and predictions

November 2024 newsletter

Cyber liability: More than coverage

Cyber insurance is becoming more streamlined and effective as we approach 2025. Market data from Embroker’s 2024 Cyber Risk Index Report found that cyber insurance adoption has reached an all-time high, with 93% of startups now carrying coverage—up from 90% in 2023 and 86% in 2022.

Rising attack frequency, with 81% of venture-backed founders reporting breach experiences
Shifting external mandates, as board requirements remain strong while investor and customer requirements soften
Growing recognition of cyber insurance as a funding facilitator, with 41% citing it as crucial for securing investment

Workers’ compensation: Adapting to new ways of working

Workers’ compensation is evolving to meet the needs of today’s workplaces, employees, and how we work:

Premium increases of 3-7% are expected due to inflationary pressures and rising medical costs
Remote work is reshaping claims patterns and risk assessment methods
Telemedicine and virtual care platforms have evolved from alternatives to mainstream solutions
Mental health coverage is emerging as a critical component, reflecting broader awareness of psychological workplace injuries
The gig economy and hybrid work arrangements are challenging traditional workers’ comp models

Property & casualty market: Responding to climate and cyber challenges

The P&C market is experiencing high demand with low supply for policies, particularly in property lines where climate risk is driving significant changes:

Premium increases of 10-15% are anticipated in catastrophe-prone regions
Carriers are implementing stricter underwriting criteria for cyber coverage in response to escalating threats
Insurance coverages that activate upon event are gaining traction, especially for climate-related risks, as opposed to those that require a claims and assessment process
IoT devices and real-time data analytics are revolutionizing risk assessment and pricing models

Key insurance industry considerations for 2025

november 2024 newsletter

As the insurance industry continues to evolve, several factors will be critical for success:

Investment in AI and machine learning capabilities must be balanced with maintaining human expertise
Risk assessment models need to account for increasingly complex and interconnected threats
Distribution strategies should embrace both traditional and embedded channels
Focus on sustainable growth while maintaining innovation and adaptability

What’s new at Embroker

Events, stories, and more

Embroker’s 2024 Cyber Risk Index Report is here

See why founders are opting for policy packages, the non-coverage value cyber brings to businesses, and more.

Expanding risks drive lawyers’ liability claims

Embroker CIO Andy Lea spoke with Business Insurance on the findings of our 2024 Legal Risk Index report, the state of professional liability for lawyers and their firms, and more.

Embroker elevates insurance with strategic partnership with Everspan

Announced at Insurtech Connect Vegas, Embroker has officially partnered with Everspan. Check out the announcement for more details on what this means for our customers, coverages, and the industry.

2025 predictions: November 2024 Embroker Newsletter