12 Insurance and Payments Trends Shaping 2025 

Despite multiple disruptions and uncertainties already this year, insurance carriers’ profound modernization efforts show no signs of slowing down in 2025 — driven by emerging industry technologies and evolving customer expectations.  

To help position your organization for success, be ready for these 12 trends in the next 12 months.  

1. Unified, Integrated Insurance Payments

Unified payment platforms integrate directly into insurers' core systems and centralize inbound and outbound transactions. This type of platform is able to transcend the capabilities of standalone payment solutions, offering distinctive features that create additional value. 

Centralized payments eliminate manual processes, reduce errors, and alleviate administrative burdens. A robust platform can also support multiple payment methods to meet policyholder digital preferences. In 2024, 92% of U.S. consumers reported using some form of digital payment, marking a new high.¹ In 2025, providing modern payments options for both premiums and claims will further enhance the customer experience by offering faster, more efficient ways to pay and be paid.  

2. Open Banking for Insurance Payments 

Over 90% of consumers use some form of open banking,² which powers account-to-account (A2A) payments, such as PayPal and Venmo. Although most transactions today are peer-to-peer, at 69%,³ open banking will increasingly be used for insurance payments. Insurers benefit from enhanced operational efficiency as payment verification becomes faster and more precise, cutting administrative delays. The technology also increases transparency and accelerates payment processing to boost policyholder satisfaction and trust.  

3. Operational Efficiency 

One way to pave a path for growth is to take friction out of the back office, which allows insurers to be more competitive for business without being bogged down by legacy processes, according to Celent.⁴  

Payments can consume considerable administrative resources, but a digitally enabled ecosystem enables new levels of efficiency through the interconnectedness of insurance technologies. To further improve efficiency, a unified payment platform can offer a single reconciliation environment, simplifying treasury operations by providing an end-to-end treasury management system for carriers. Some digital solutions can save up to an hour of manual reconciliation effort per transaction,⁵ a significant reduction when multiplied across thousands of payments.   

4. Workers’ Compensation 

The NCCI reported a 1% increase in workers’ compensation premiums in 2024.⁶ However, there is an ongoing trend in several states of reducing workers' compensation premium rates. These hikes come at the same time as new and proposed changes to many workers’ compensation systems across the country.⁷  

Innovative payment options and reconciliation tools will help define a new era for the sector. Emerging models such as pay-as-you-go workers’ compensation can align premiums with real-time data, offering flexibility and efficiency. These advancements will not only reduce delays but also boost transparency.  

5. Payment Fraud Detection and Prevention 

Checks remain the most vulnerable payment method, with 80% of organizations experiencing fraud attacks or attempts through this channel.⁸ Insurers will continue to combat payment fraud by implementing more digital payments and increasing adoption rates. 

Collaboration with financial institutions and sharing fraud intelligence will further fortify defenses. Continuous monitoring and adaptive algorithms can ensure proactive responses to new threats, reducing vulnerabilities. By working with a payments network that employs these strategies, insurers will enhance security, safeguard assets, and build policyholder trust. Ultimately, a platform needs to deliver a fraud-resistant payments ecosystem that supports seamless and secure transactions across the insurance landscape and across all payment channels and workflows — all the time. 

6. Life Insurance Transformation 

The penetration of life insurance in Western markets has declined 1.6% since 2000, and its global penetration rate is now just 3%. A shift in demographics is one of the main reasons, as millennials and Gen Z consumers are typically less likely to purchase coverage compared to older cohorts.⁹ 

Technology alone won’t be able to solve life insurance’s challenges. The 5% of carriers who achieve a best-in-class status do so largely because of their ability to deliver exceptional, deeply personalized policyholder experiences.¹⁰ Digital payment platforms, however, will be able to help enhance the customer experience by making services more accessible and efficient. 

7. Payment Orchestration Growth 

As the process of centralizing and managing payment operations, payment orchestration plays a vital role in increasing customer satisfaction and reducing costs. As such, the global digital payment market is expected to grow from $8.97 trillion in 2023 to $28.16 trillion by 2032.¹¹ 

With this increasing adoption of digital payments, businesses will prioritize seamless, integrated solutions to manage complex payment ecosystems. These solutions will then enable an organization to streamline processes — supporting multiple payment methods and compliance needs in a unified framework.  

8. Digital Wallets 

Digital wallets are now the fastest-growing payment method in the United States.¹² These transactions are anticipated to increase 77% by 2028, topping $16 trillion.¹³ With their rising popularity, insurers will fully capitalize on this trend to the benefit of their businesses and their customers. 

For insurance carriers, digital wallets enable secure transactions that reduce processing times and eliminate traditional administrative delays. Policyholders likewise enjoy a fast, secure, and user-friendly process. More than 20% of consumers use their digital wallets to pay insurance premiums.¹⁴ 

9. Cybersecurity and Risk Management 

Global spending on cybersecurity services and products is expected to exceed $1 trillion over the next five years, highlighting the importance of security.¹⁵ The insurance industry is prioritizing advanced cybersecurity and compliance to meet evolving regulations and protect sensitive data.  

Emerging technologies like real-time payments, blockchain, and open banking will aid improved transparency and efficiency. Investments in AI and data analytics will drive better fraud detection and risk management, reducing vulnerabilities. By embedding cybersecurity into digital transformation, insurers will be able to ensure seamless, end-to-end data protection, strengthening trust and compliance. 

10. Blockchain Technology 

Blockchain is a decentralized, digital ledger to securely record and verify transactions. The blockchain in insurance market is expected to grow from $1.94 billion in 2024 to $3.11 billion in 2025.¹⁶ 

Blockchain will increasingly help fight fraud by providing an immutable ledger in addition to automating complex processes like claims processing, policy management, and underwriting. For instance, in parametric insurance, smart contracts can instantly trigger payments after a weather event, such as a hurricane exceeding a predefined wind speed. By recording these disbursements in the blockchain ledger, smart contracts will enhance transparency and ensure tamper-proof policy records for all parties involved in a claim.  

11. Real-Time Payments 

A vast majority of consumers prefer faster payments, with 75% of respondents in a Mastercard survey saying they would like all digital payments to be in real-time.¹⁷  With instant transaction processing through real-time payments (RTPs), policyholders receive immediate payment confirmation, alleviating anxiety about delays or disruptions.

On the claims side, and crucial to fulfilling the promise of insurance, RTPs for disbursements ensure policyholders receive funds immediately, providing vital support during disasters. On the operational side, RTP eliminates manual reconciliation tasks, enabling insurers to process claims and billing updates more efficiently. By adopting RTPs, insurers will not only simplify claim payment processes but also position themselves as leaders in customer-centric innovation. 

12. AI Regulatory Compliance 

AI advancements are improving many areas of insurance, including risk assessment, fraud detection, and customer service. Agentic AI, capable of autonomously performing tasks, can power applications like personalized policy recommendations, automated claims processing, and proactive risk management. 

However, as AI adoption grows, regulatory compliance has become a priority. Despite evolving AI regulations, “the core principles of responsible AI (fairness, ethics, accountability, and transparency) have been established by governments and industry organizations around the world,” according to Celent.¹⁸ To ensure AI technologies are both effective and responsible, insurers will need to carefully balance innovation with shifting regulations. 

For a deep dive into each of these areas, stay tuned for our upcoming 12 Insurance Industry Trends for 2025 whitepaper.

Are You Ready for 2025? 

The upcoming year has the potential to be a transformative one for insurers, as many areas of the industry still require reinvention and innovation. The journey ahead will require strong partnerships to navigate it successfully and make it a watershed year for insurers’ adoption and innovative application of modern technology. If you don’t have strong digital payments capabilities, you’re not ready for 2025. As the leading digital payments network for the insurance industry, we’re here to help. Get in touch. 

Sources:  

1. McKinsey – https://www.mckinsey.com/industries/financial-services/our-insights/banking-matters/state-of-consumer-digital-payments-in-2024  
2. Visa – https://usa.visa.com/content/dam/VCOM/regional/na/us/services/documents/open-banking-open-possibilities.pdf  
3. Visa – ibid 
4. Celent – https://www.celent.com/insights/630230329 
5. Mastercard – Straight Through Processing Whitepaper, https://www.mastercard.com/news/ap/en/research-reports/  
6. NCCI –  https://www.ncci.com/Articles/Pages/AU_SOTL-Report-Metrics-Show-Strength-of-WorkersComp.aspx  
7. Reuters – https://www.reuters.com/legal/legalindustry/changes-state-workers-compensation-insurance-rates-laws-reflect-national-trends-2025-01-07/ 
8. AFP – https://www.afponline.org/training-resources/resources/survey-research-economic-data/details/payments-fraud 
9. Atlas Magazine – https://www.atlas-mag.net/en/article/the-american-insurance-market-the-world-s-number-one-market 
10. Capgemini – https://www.capgemini.com/insights/research-library/world-life-insurance-report/ 
11. Research and Markets –  https://www.researchandmarkets.com/reports/5521693/digital-payment-market-report-forecast-by-type 
12. J.D. Power – https://www.jdpower.com/business/resources/customer-satisfaction-digital-wallets-continues-grow-usage-skyrockets 
13. Nasdaq - https://www.nasdaq.com/articles/future-digital-payments-trends-watch-2024 
14. One Inc – Internal Data 
15. Nasdaq – https://www.nasdaq.com/articles/future-digital-payments-trends-watch-2024 
16. The Business Research Company – https://www.thebusinessresearchcompany.com/report/blockchain-in-insurance-global-market-report  
17. Mastercard – https://www.mastercard.com/news/perspectives/2023/real-time-payments-what-is-rtp-and-why-do-we-need-instant-payments/ 
18. Celent – https://www.celent.com/insights/861351198