 By Frank Schepers, Global Leader, Insurance Consulting and Technology and Sina Thieme, Senior Director, Insurance Consulting Technology, WTW
Frank Schepers and Sina Thieme discussed the impact of technology on insurance, exploring topics such as risk modelling, data analysis, and distribution channels. From this, five urgent priorities emerged – each one a call to action for insurers who want to thrive in a rapidly evolving landscape.
01. Create an incline in the playing field that AI is flattening
AI is democratizing access to advanced analytics, levelling the playing field between incumbents and challengers. But that doesn’t mean everyone wins. In 2025, AI is no longer a differentiator – it’s a baseline. The real edge now lies in how insurers apply AI: embedding it into underwriting, claims, and customer engagement in ways that are proprietary, explainable, and scalable.
Frank Schepers emphasized that “without the clever thinking at the back end, why collect data at all?” The key is to combine AI with deep domain expertise and unique data assets. Insurers must also navigate the ethical and regulatory implications of AI. As AI becomes more embedded in underwriting, pricing, and claims, scrutiny over how these systems make decisions is intensifying. AI systems can unintentionally replicate or amplify biases present in historical data. In insurance, this could lead to proxy discrimination—where seemingly neutral variables correlate with protected characteristics like race, gender, or income level. For example, using post codes (ZIP codes) or credit scores in pricing models may inadvertently disadvantage certain communities.
This has triggered a wave of regulatory attention. 24 U.S. states have adopted the NAIC’s model AI governance framework, requiring insurers to implement robust oversight of AI systems, including documentation, testing, and accountability mechanisms. If insurers fail to act, the consequences could be severe – from legal risk and reputational damage to market distortion and regulatory backlash. As Frank Schepers noted, the value of AI lies not just in automation, but in intelligent, responsible application. That means building explainable models, auditing outcomes for bias, and ensuring human oversight in high-impact decisions.
For large insurers, building proprietary models trained on their own data is becoming a key strategic asset. But not all insurers will have the scale or resources to do this alone. Those without the financial or data assets may need to buy, share, or co-invest. Turning unstructured data into structured insights—especially in claims, pricing, and underwriting—will be a priority. Re-thinking core processes around the possibilities of agentic AI could unlock a new level of value creation.
02. Develop a strategy for underinsured risks
The protection gap—between insured and total economic losses—remains stubbornly wide. From climate change to cyber risk, many exposures remain underinsured or entirely uninsured. Technology offers a path forward. By using granular data and advanced analytics, insurers can better understand emerging risks and tailor products to underserved segments, reducing the need for an uncertainty premium and thus improving affordability.
Sina Thieme noted that "insurers understanding the risks better also allows them to communicate those risks to policyholders better," providing personalized risk management advice and mitigation techniques. This is especially critical in regions where insurance literacy is low or affordability is a barrier. Insurers must use data to identify protection gaps, then co-create solutions with communities and partners to close them—profitably and sustainably.
03. Understand how to play in a world with more diverse capital sources
The capital landscape is shifting. Private equity, insurance-linked securities (ILS), and other alternative sources are flooding into the market, attracted by uncorrelated returns and new risk transfer mechanisms. This influx is reshaping the economics of insurance. As Sina Thieme observed, "Q1 2025 has been as busy as never before, with investors eager to take on insurance risk."
For traditional insurers, this means adapting to a multi-capital world. It’s no longer just about balance sheet strength—it’s about capital agility. Insurers must learn to partner with, compete against, and differentiate themselves from these new players. Ultimately, insurers must develop capital strategies that blend traditional and alternative sources, optimizing for flexibility, cost, and risk appetite.
04. Re-energize digital distribution
Technology continues to transform the distribution landscape. Digital has long been a necessity in most markets, but all distribution channels will profit from higher degrees of automation, more insights at the point of sale, and the power of predictive analytics.
Despite this, many insurers are still stuck in “digitized” versions of analogue processes. The next frontier is intelligent distribution: using AI, behavioural data, and omnichannel platforms to deliver personalized, seamless experiences. In emerging markets, mobile-first platforms are unlocking new customer segments. In mature markets, embedded insurance and API-driven ecosystems are redefining how and where insurance is sold.
Frank Schepers pointed to India as a case study, where mobile technology has expanded reach dramatically. But he also warned that “digital doesn’t solve affordability.” The challenge is to pair digital reach with product innovation that meets the needs—and budgets—of diverse populations. That means investing in digital ecosystems that go beyond transactions, building platforms that educate, engage, and empower customers across the lifecycle.
05. Do your data homework
Data is the foundation of every transformation on this list. Yet many insurers still struggle with fragmented systems, poor data quality, and unclear governance. In 2025, the bar is higher. Synthetic data, real-time analytics, and AI-driven decision-making are becoming table stakes. Insurers must treat data as a strategic asset, investing in infrastructure, governance, and culture to unlock its full potential. And that means breaking down silos, standardizing data models, and embedding analytics into every decision. It also means upskilling teams and fostering a culture of data literacy across the organization.
Right now every insurer should be conducting a data maturity assessment, then building a roadmap to elevate data from operational input to strategic differentiator.
In summary… the time for incrementalism is over
The next 18 months will define the next decade of insurance. The tools are available. The capital is flowing. The risks are evolving. The only question is: who will act boldly enough to lead?
To succeed, insurers must:
Differentiate with AI, not just deploy it.
Close the protection gap with data-driven innovation.
Navigate capital complexity with agility and foresight.
Reinvent distribution for a digital-first world.
Master their data to power every decision.
This is not a time for cautious evolution. It’s a time for decisive transformation. The insurers who embrace this moment will not only survive—they’ll shape the future of the industry.
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