The evolution of insurance: key business trends and leadership implications

The insurance industry is experiencing profound changes, driven by technological advancements and evolving market dynamics. Through extensive experience with clients and a comprehensive review of recent business changes, we have identified a number of emerging trends in the insurance sector. This article delves into these and explores their implications for leadership within the industry.

Softening market

Trend: Many insurance leaders are anticipating that the market will soften over the next 6-9 months. This shift indicates increased competition, with insurers lowering their premiums and offering more favourable terms to attract customers. Policies may offer more extensive coverage options and higher limits, and insurers may need to relax their underwriting standards, making it easier for customers to get coverage. This competitive environment poses challenges for insurance companies in maintaining business sustainability.

Implications for leaders: Leading the workforce in a softening insurance market demands a strategic and empathetic approach. Strategically, leaders must identify the key talent critical to the business, engage with them, and motivate and inspire them. When re-aligning the business to tackle the tough market situations, leaders should manage change empathically, treating employees with genuine care and support.

Client story: In 2024, we partnered with a specialty insurance and reinsurance company to identify how prepared their senior leaders and key talent are for the upcoming changes that they will need to make as leaders. We worked with these leaders to identify – at the individual level – how to leverage their strengths and where to focus their development energies. We also provided the organisation with cohort level analyses of strengths and development needs given the leadership challenges for the business and worked with the organisation to build individual and cohort level development support.

Widening trust gap

Trend: Trust in financial institutions, including insurers, is declining. The latest 2025 Edelman Trust Barometer indicates that the financial services industry has fallen out of the top ten most trusted industries. This decline is attributed to perceived failures in addressing key societal issues and a lack of transparency. The 2025 Edelman Trust Barometer reveals a significant decline in trust across all major institutions. A majority of respondents globally express a sense of grievance, feeling that institutions make their lives harder and serve narrow interests. This sentiment is particularly strong among younger demographics. For insurers, this trust deficit poses significant challenges. Insurers rely heavily on customer trust, and a lack of trust can lead to reduced customer loyalty and increased scrutiny.

Implications for leaders: There is an urgent need for leaders in the insurance industry to rebuild trust. To address this trust deficit, insurers should define a new, clear customer vision that reinforces trust, openness and transparency. This requires a cultural shift within the workforce, as organisations communicate with customers and demonstrate their values through their employees. Furthermore, to gain customers’ trust, organisational leaders must show a genuine commitment to addressing societal issues such as climate change and economic inequality, which are of increasing concern to the public. To support this, insurers should seek opportunities to build broader collaborations across institutions and industries to tackle these societal issues effectively.

Client story: Powered by our sister company, t-three, we support many clients in achieving sustainable change and delivering better results. Over the past 5 years, we have partnered with a major transportation organisation to shift their culture towards a new customer vision. We designed an integrated and blended experience including digital learning, social learning platforms, facilitated workshops, experiential learning using actors, one-to-one coaching, 360-degree feedback tools, etc. These activities were applied across all levels of the organisation, including senior and middle management, as well as frontline teams. Overall, the team delivered 50,000 employee training days, 7,500 coaching hours and 1,300 online learning hours. The organisation now has 30 action learning teams driving improvements to sustain changes and improve organisational performance. Our impact analysis for the client demonstrated a robust increase in customer service, trust, and engagement.

Accelerating pace of change

Trend: Technological advancements are transforming every business sector, and the insurance industry is no exception. The integration of Robotic Process Automation (RPA) and Generative AI (Gen AI) is revolutionising the way insurance companies operate at a rapid pace. In the back office, AI streamlines processes such as claims processing and risk assessment. On the front end, AI enhances customer service through predictive analytics and personalised experiences. Beyond technological development, the insurance industry also faces more uncertainties that could swiftly change the business landscape. Climate change, geopolitical conflicts, macroeconomic volatility, etc. all contribute to higher risks and a faster pace of change.

Implications for leaders: To effectively support their clients and maintain business stability, leaders must be agile and responsive to changes. They need to make decisions quickly, often with less certainty and predictability. This requires leaders to demonstrate resilience and adaptability, be comfortable operating in ambiguity and outside of their comfort zone, and manage the stress and pressure that comes with this. They also need to be able to keep a clear head for decision-making, while knowing what level of information they need to operate effectively. In the face of rapid technological change, leaders should build awareness of their knowledge gaps and identify who has more expertise or different perspectives to be involved in decision-making.

Client story: Since 2024, we have partnered with a construction and property consultancy firm to develop their leadership, supporting the delivery of their progressive strategy. A key aspect of our collaboration with this client involves facilitating monthly, two-day offsite board sessions aimed at enhancing the executive board’s effectiveness in delivering the strategic objectives, addressing risks and ambiguity, and making decisions with pace. We utilised psychometric tools and experience-based group activities to provide the board with insight into their individual and collective styles in communications, risk-taking, decision-making, etc. As a result of these sessions, trust among the executives has increased; they had more robust and honest discussions and were able to delegate more authority in decision-making.

Conclusion

The insurance industry is at a pivotal point, with significant trends reshaping its landscape. Leaders must navigate a softening market, rebuild trust, manage accelerating risks, and embrace technological advancement. At Kiddy, we have the privilege to partner with numerous insurance companies, supporting them in identifying and developing their talent, as well as transforming their organisational culture. This positions them to better navigate future challenges and stay ahead.