AI in InsurTech faces scrutiny as profit takes priority, research reveals

By Puja Sharma

The insurance industry is undergoing a fundamental shift powered by emerging technologies, evolving consumer expectations, and a strategic pivot toward profitability and innovation. According to the newly released InsurTech Global Outlook Report 2025 by NTT DATA, InsurTechs are not only reshaping the insurance value chain—they’re redefining how insurers think about growth, risk, and customer engagement.

After years of aggressive funding and experimentation, 2024 marked a turning point as investors and insurers recalibrated their focus toward sustainable innovation. This recalibration, according to the report, is unlocking new value through smarter investments and deeper technological integration, setting the stage for a more efficient, customer-centric insurance model.

“Today’s customers expect coverage that fits around their lives: personalised, available in real time, and built into the digital services they already use,” said Dave Brooks, Head of Insurance Practice at NTT DATA UK&I. “People don’t want to dig through paperwork or wait on hold to file a claim. They want their insurance to be as intuitive and responsive as the rest of their digital lives, whether that’s getting a prompt about a lower premium based on their driving, or having protection automatically activated when they make a large online purchase. That kind of experience is what builds trust and loyalty.”

A New Era of Hyper-X and AI-ssurance

The report introduces the concept of Hyper-X—a new benchmark in customer experience where hyper-personalisation, hyper-automation, and hyper-efficiency define the user journey. Through advanced use of AI, IoT, synthetic data, and real-time analytics, insurers are building dynamic policies that adapt instantly to changing user behaviour and risk profiles.

In parallel, the rise of AI-ssurance marks a leap toward autonomous, predictive, and intelligent insurance. Cutting-edge technologies like Generative AI, Quantum Computing, and digital twins are being harnessed to deliver unprecedented precision in underwriting, automate claims, and forecast risks more accurately than ever before.

The Ecosystem Revolution and the Rise of INSUREVERSE

One of the standout trends of the report is the growth of ecosystem-driven insurance, a model where insurers collaborate seamlessly with InsurTechs and adjacent industries to offer integrated, always-on protection. Termed the INSUREVERSE, this new paradigm leverages embedded insurance, parametric coverage, and proactive risk management to meet customers wherever they are—whether that’s at the checkout page of an e-commerce platform or on the dashboard of a ride-hailing app.

This ecosystem approach not only improves customer convenience but also opens up new revenue streams and data-sharing opportunities, paving the way for predictive, preventative, and even invisible insurance experiences.

Investment Shifts and Industry Priorities

Over the past four years, the InsurTech space has attracted $40 billion in global investment, with a growing emphasis on AI-powered risk assessment and embedded insurance solutions. These trends are gaining momentum in industries like fintech, mobility, and healthcare, where insurance is increasingly offered as a built-in, value-added service.

The report also spotlights critical industry focus areas including cybersecurity and climate risk, where InsurTech innovation is driving new product development and cross-sector partnerships.

What’s Next?

With 82% of insurers planning to upgrade their data architecture within the next 12 months, the shift from digitalisation to true intelligence is well underway. The road ahead will be defined by those who can unify data, personalise services in real time, and forge strategic partnerships that embed insurance into everyday life.

As the report suggests, the future of insurance lies not just in protection, but in proactive, personalised engagement—turning insurance from a safety net into a seamless part of the digital experience.