Trends 2025: Some Insights From Pie Insurance

These insights are by Dax Craig, Co-Founder of Pie Insurance and look ahead at the key trends for 2025;

Regarding Macroeconomics:

“I anticipate that economic changes such as tariffs, inflation and interest rates will impact insurance heavily–both in positive and negative ways–as well as small businesses in 2025. For small businesses the cost of doing business may rise – including their cost goods sold and the services they buy. Businesses will need to make the tough decision to either absorb the higher costs or pass them onto their customers.”

Regarding Workers’ Compensation:

“The continued double digit worker’s comp rate decreases  in 2024 were a bit  surprising. I expect to see single digit rate decreases in 2025 and in some cases even some small rate increases in a few states. The good news is that rate decreases are a strong signal employees are having fewer injuries – which is a great thing for small businesses and society overall. “

Regarding Commercial Auto Insurance:

“I’m stunned that despite double digit rate increases, the commercial auto insurance market is still unprofitable. The industry has some work to do in 2025 to diagnose how they’re still underpriced and to ensure potential customers understand the implications of going without coverage. If anything ever happened, the impact would be astronomical and their businesses would cease to exist.”

Regarding AI in Insurtech:

• “AI adoption is going to continue to accelerate the speed of claims processing, risk assessment and overall operational efficiency. The gap between insurers that are able to be nimble and implement these technologies and those who are saddled with legacy technology that won’t allow them to utilize AI platforms will significantly widen.  Those who integrate them into their business models will push ahead in the market, be more efficient and be able to offer lower costs to the market. Insurers that can’t or won’t are going to get left behind. 2025 will be the year we will see who makes the cut.”
• “With the continued adoption of AI we will also see improvements take place for underwriting accuracy and as well as cycle times. We will also see a spike in the speed and efficiency of claims handling. All of these improvements will result in positive business changes,  open bandwidth for ideation in other areas of need and positively impact the overall experience.”
• “The industry is working toward AI assisting humans in better predicting the level of severity of a claim. While still early in its development, this capability will be invaluable to being able to see the bigger picture of a claim and getting the customer access to the support and assistance they need, faster. Reaching this level of specificity is not only good for insurance companies because in the long run it saves money, but most importantly, it puts the customer first.”
• “There should be no concern in the market, jobwise, regarding the introduction of AI. Underwriters will always have a job and the combination of AI and humans is important to bettering the industry. What’s important is finding the balance between providing AI with the work to process more and more businesses, so the underwriter can focus on the things an AI tool could never do.”