The insurance industry, like many others, is undergoing significant transformation, driven largely by disruptive technologies, changing consumer behaviour, and an increasingly complex global landscape.

As we move further into 2025, these shifts are creating both opportunities and challenges for insurers, brokers, and customers alike.

Paul Sanders, Regional Managing Director at GIB Inland, and Tracy McLaughlin, Regional Managing Director at GIB Coastal, shed light on the key trends defining the future of the industry.

1. Softening of London markets

Over the past two years, investor capital has flowed into global insurance markets, increasing capacity and competition, particularly in London which has led to lower rates for corporate insurance. Locally, however, the market remains more stable.

“The increased capacity in London is reshaping the competitive environment,” says Sanders. But locally, markets are holding steady. This dynamic will be crucial in 2025, especially for businesses seeking coverage that aligns with their unique risk profiles, industry-specific exposures, and financial strategies.”

2. Economic pressures and Evolving Consumer Behaviour

Affordability is top of mind for consumers as economic pressures persist. Many are reducing their insurance spend, especially in personal lines, and direct insurers are benefitting from this shift with their lower-cost, online-first offerings.

“Consumers are increasingly focused on price, but brokers remain uniquely positioned to provide tailored advice, particularly in complex areas like life insurance and comprehensive household cover,” adds McLaughlin

3. The Rise of Insurtech startups

The rise of Insurtech startups, such as Naked and Partnership, is a trend that brings efficiency and streamlined processes to the forefront, providing lower-cost solutions for consumers. However, Sanders highlights that while Insurtech firms excel at efficiency, they can’t replicate the personal relationships brokers offer, especially when it comes to managing claims. “The human element is a huge differentiator, particularly for clients with complex needs or higher-value claims."

4. AI and Automation: A double-edged sword

AI and automation definitely enable faster, more accurate assessments, reducing human error and operational bottlenecks. However, this shift has its challenges. Automation improves efficiency, for example, but it limits the broker's ability to negotiate terms, which remains a vital part of their role. Even in the case of larger clients, AI-driven analytics are essential for offering insights into things like self-retention structures, but it’s the broker’s personal touch that adds real value.

5. Geopolitical and global market uncertainty

Events in major markets from tariff shifts to political instability have far-reaching implications for South African businesses.

“The geopolitical landscape can affect insurance availability, pricing, and even regulatory frameworks,” explains Sanders. “Unexpected global events are now part of the risk matrix our clients face daily.”

6. Personalised Insurance Through Behavioural Data

With the proliferation of IoT devices, wearable tech, and telematics, insurers now have access to unprecedented volumes of data. This allows for personalised pricing models based on individual behaviour, not just traditional demographic factors. “There’s a big opportunity here,” says McLaughlin. “If used right, data can help us proactively guide clients, not just respond to risk but help prevent it.”

7. Shifts in customer loyalty and purchasing behaviour

Loyalty in personal insurance is decreasing. Many customers, especially younger ones, prefer simplicity, speed, and low costs. Direct insurance companies are becoming advanced online platforms to meet these demands. For more complex needs, like commercial or household insurance, brokers are still important. "They help clients understand their risks and the coverage they need," says Tracy.

8. Proactive risk management & shifting insurer expectations

Demand for insurance remains steady, but the requirements from insurers have changed. There is an increasing focus on proactive risk management and stronger client governance. “Insurers are asking more questions now,” says Sanders. “They want to see that clients are actively managing their risk environment before they offer capacity. This is where brokers play a vital role in helping clients prepare and demonstrate their readiness.”

9. Adapting to the climate crisis

The escalating frequency and severity of natural disasters are leading to higher insurance premiums, particularly in high-risk areas. Insurers are reassessing coverage strategies and collaborating with governments to manage the financial implications of climate-related events. This trend is pushing insurers to develop innovative solutions to mitigate the financial risks posed by climate change, while also striving for greater sustainability in their operations and offerings.

Additionally, third-party valuations and more detailed risk assessments are becoming standard practice, reflecting the sector's commitment to precision and adaptability. As the industry continues to mature, there’s a stronger focus on professionalism, not just for regulatory reasons, but to truly add value to clients.