Trends
Trends
Jun 5, 2025

What’s New in AI Insurance: June 2025

Key AI insurance trends in June 2025: new products, scaling challenges, major events, and the shift from pilots to production.

What’s New in AI Insurance: June 2025

Major industry events, new products, and strategic trends are shaping the AI insurance landscape. Here are the most important recent news and trends:

Insurtech Insights USA 2025

The Insurtech Insights USA 2025 conference is highlighting the evolving relationship between humans and AI in insurance.The event emphasizes collaboration rather than competition. Keynotes and panels include industry leaders from Munich Re, MetLife, AXA, Zurich, Microsoft, and more, focusing on how AI is moving from experimentation to delivering real business value in underwriting, claims, and customer experience. Sessions also address the challenges of scaling AI from proof-of-concept to full production, including compliance and cultural hurdles.

New Insurance Products for AI-Related Risks

Lloyd’s of London has launched a pioneering insurance product via the startup Armilla, covering losses from AI malfunctions, such as chatbot errors or AI hallucinations. This product addresses growing concerns about accountability and liability when AI systems make mistakes that lead to financial or reputational harm. The coverage includes court claims against businesses whose AI products underperform or cause third-party damage.

At AI Insurance Policies, we have established a relationship with Armilla. If you would like to connect with the right person there, don’t hesitate to reach out and we will help you get started.

Rapid Adoption and Cautious Investment in AI

A recent survey shows that 78% of insurance organizations plan to increase their technology budgets in 2025, and AI is the top innovation priority. However, many firms are still exploring generative AI, and only a minority have full-scale production deployments. The industry is advised to focus AI adoption on high-volume, repetitive tasks with clear feedback loops, rather than blindly applying AI across all areas.

AI’s Impact on Life Insurance

AI is driving significant changes in life insurance, with automation, claims processing, customer service, and underwriting as key use cases. Over half of industry respondents see AI, machine learning, and blockchain as the most impactful trends for the next few years. The shift is now toward widespread implementation and value realization. Leaders like Manulife (John Hancock) report major gains from combining classical AI and generative AI, however, risks such as AI hallucinations, regulatory challenges, and data leaks remain top concerns.

Notable AI-Driven Innovations and Partnerships

Recent product launches and partnerships include:

  • Sixfold’s "Discrepancy Scan" for AI-powered underwriting risk analysis.
  • Celonis and Apolix’s AI Claims Management Control Center to reduce insurance claim leakage.
  • Branch Insurance integrating Kyber’s AI platform to streamline claims notification.
  • Qantev raising €30 million for AI-powered claims management in health and life insurance.
  • Tesla offering insurance discounts for drivers using supervised Full Self-Driving technology.
  • MAPFRE publishing a manifesto for ethical and responsible AI, setting a precedent for industry standards.

Industry Cautions and Regulatory Focus

The industry is increasingly aware of the risks associated with rapid AI adoption, especially regarding explainability, accountability, and data privacy. Regulatory uncertainty and the potential for unregulated AI to introduce systemic risks are major discussion points, particularly as the US and UK diverge from global AI regulatory efforts.

Conclusion

The AI insurance industry in 2025 is marked by rapid innovation, new products addressing AI-specific risks, cautious yet increasing investment, and a strong focus on responsible, ethical AI adoption. The shift from pilot projects to production-scale AI is underway, but regulatory and risk management challenges remain at the forefront.

References:

Maria Ignatova
Maria Ignatova
Web Developer

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