The insurance market in the United States prides itself on being one of the largest in the world with significantly high premium volumes and business revenue. According to Statista “insurance premiums written in the US exceed one trillion...dollars annually” (Statista: Insurance industry in the U.S.)
Although faced with multiple challenges over recent years, particularly around cyber security, climate change, AI and regulatory changes, the industry has shown remarkable resilience. Projections show that the “US general insurance industry is set to grow at a compound annual growth (CAGR) of 8.5% from $2.18 trillion in 2023 to $3.03 trillion in 2027” (Global data: US general insurance industry to surpass $3 trillion by 2027). Additionally, despite inflationary pressures, consumer confidence remains high, thanks to a strong market and steady wage growth. The outlook for 2025 is positive with steady growth, recovery in many key specialisms and strong consumer demand.
Job growth
Insurance job growth across the US remains strong with employment surpassing three million according to data by the Bureau of Labor Statistics. Since August 2023 the industry has added 40,600 jobs, driven primarily by the construction and health care sectors. (Insurance Business: US insurance employment surpasses 3 million)
For employers, this resilience offers a positive outlook for business growth and hiring, but it also means increased competition for top talent. Industries such as technology, healthcare, and finance continue to be strong performers, while sectors like renewable energy, logistics, and e-commerce have seen accelerated growth.
Technological innovation
The insurance industry stands on the edge of a major technological evolution. Increased complexity around new regulations and products will push insurers to embrace advanced software and AI data tools to meet consumer demand and stay competitive.
This will be particularly prevalent in underwriting which will require more sophisticated and data driven solutions to enable faster, more accurate risk assessments. Tools which will enable insurers to analyze information and data in real time from disparate sources, during the underwriting process will be key.
Insurers will also need to evidence compliance with various digital focused regulations such as the Digital Operational Resilience Act (DORA) and other potential changes aligned to the US presidential administration. Businesses will need to update systems, and adopt specific automation to ensure compliance with the latest regulatory changes that are applicable to their processes and operations.
To stay up to date with new ways of working, enhanced data modelling and to ensure technology compliance upskilling whether through certifications, specialist training or online courses will be a non-negotiable for professionals throughout 2025. For employers recruiting talent with the right expertise in AI, data science and machine learning will be essential to business operations.
Natural disasters will continue to redefine coverage
The growing impact of climate change and severe weather conditions will continue to shape the insurance landscape throughout 2025. According to research insured losses from natural disasters in 2024 accounted for more than $100 billion globally, despite no single event causing catastrophic damages (TheBrokers: 2025 Insurance outlook).
These types of weather conditions have seen insurers implement stricter underwriting and AI based catastrophe modeling to refine and improve risk assessments. Businesses are increasingly taking into consideration smaller risks such as wildfires, convective storms and icy conditions to predict risks which poses a challenge for consumers as frequency of these types of events often increases premiums.
A focus for 2025 will be how insurers offer tailored solutions to consumers in regions vulnerable to natural disasters which are often subject to unlicensed surplus lines insurers who offer coverage for risks that admitted carriers may reject.
Mergers and Acquisitions gain momentum
According to TheBrokers data “analysts predict 550-600 deals this year, a slight increase from 2024” (TheBrokers: 2025 Insurance outlook). Corporate M&A deals and PE activity look particularly strong with a large proportion of CEOs cited as willing to consider a merge or acquisition. According to Boston Consulting Group’s M&A sentiment survey highlights an increase in positive M&A sentiment from 81 in August 2024 to 91 in January 2025 (BCG: M&A outlook 2025). Technology focused transactions are likely to be more appealing throughout 2025 as brokers pay more attention to emerging technologies and digital solutions.
The U.S. insurance industry’s ongoing resilience, coupled with strong job growth, technological advancements, and improving supply chains, provides a solid foundation for continued industry expansion throughout 2025. For insurers, success will depend on attracting and retaining top talent, fostering innovation, and adapting to new market conditions. For professionals, staying adaptable, upskilling in emerging technologies, and aligning skills with growth sectors will be key to navigating the evolving insurance market.
If you would like support with your hiring strategy or are looking for a new career opportunity, contact one of our insurance recruitment specialists who will be happy to help.
Sources:
BCG: M&A outlook 2025
Deloitte: Insurance industry perspective
Deloitte Insights: 2025 global insurance outlook
Global data: US general insurance industry to surpass $3 trillion by 2027
IMF Blog: How Pandemic Accelerated Digital Transformation in Advanced Economies
Insurance Business: US insurance employment surpasses 3 million
PwC: Attracting talent in an insurance industry talent crisis
Texas Insurance Training Academy: The Power of Knowledge: Why Insurance Training Matters
TheBrokers: 2025 Insurance outlook
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