As fires raged in Los Angeles last week (and continue their threat this week), many—even celebrities—have taken to social media to rage against insurance companies.
A Cake & Arrow employee, when asked what might be in store for the industry in 2025, offered: “I think insurance, optically, has a very difficult year ahead of it…all aspects of the business are going to be under a lot of scrutiny, and from people who aren’t plugged into the industry.”
While the challenges are self-evident, now more than ever, it’s worth imagining what a happier future might look like.
What if, against the odds, state and local governments, communities, individuals, and corporations—including insurance companies—came together around a shared vision for a future we all want to inhabit? What if the industry could transform itself to better serve its customers, employees, and society as a whole?
So in the spirit of hope, we took some understandably pessimistic predictions and did our best to flip them on their heads— to consider how the very real problems facing the insurance industry and its customers could also present opportunities. This is not just a call to action for the insurance industry to rethink its relationship to its customer but a chance for customers to claim access to the kind of protection and stability they desire and deserve.
The result? Three emerging themes—or what we’re calling CX futurescapes—that can help us reimagine how insurance might rise to meet this unprecedented moment and chart a safer, more sustainable path forward
Futurescape 1: Adoption of preventative care model in insurance
Starting the new year with the devastating fires in Los Angeles has laid bare the escalating homeowners insurance crisis—a reality scientists, economists, and other experts have warned us about for years. Now, it’s here.
As climate change impacts intensify, more people are not only experiencing the effects but also becoming aware of their own risks. Last year, in qualitative interviews we conducted with homeowners, this shift was already evident. Homeowners were paying closer attention to their insurance and beginning to expect more from their insurers—especially when it came to proactive support in managing their risks. Many, however, were left feeling disappointed and unprotected.
But imagine if this story had a different ending? Picture a future where the homeowners insurance industry takes a page from healthcare’s playbook, expanding its role to focus not just on reactive coverage but on preventative care. Just as rising healthcare costs and demand for risk reduction (not mention regulation) drove health insurers to invest in prevention, 2025 could be the year where homeowners insurance begins its own preventative revolution.
In this future, insurance companies would do more than sell policies—they’d actively partner with homeowners to reduce risks before disasters strike. They’d offer tools,services, experiences, and support to help people assess vulnerabilities, improve resilience, and make informed decisions about their homes. New dashboards and alerts would provide predictions and real-time data on weather patterns, fire risks, and property conditions become widely accessible, empowering both insurers and customers to take proactive measures.
Companies like Mitigrate have the data to prove that this approach isn’t just good for customers, but also for business, and is working with claims professionals and underwriters to reduce climate risk and prevent losses. While promising startups like Faura and Delos are working on closing coverage gaps by empowering insurance companies with better risk assessment data and helping homeowners better understand and mitigate risk.
In 2025, we hope to see:
- Home sensors—smart and or/lo-fi—become a standard and more widely accepted part of policy offerings–provided and maintained by insurance companies to help reduce risk and provide peace of mind to homeowners and renters
- Insurance companies advocate for and incentivize fireproofed homes/buildings, more resilient building standards and wider adoption of prefab housing and other innovations that can meet these standards and are cheaper and faster to build
- Pre-approving claims for preventative repairs go mainstream. Pre-approved claims for repairs or renovations aimed at reducing risks, such as fixing a leaky roof or reinforcing windows for storm resistance. This would encourage proactive risk management and minimize the severity of damage should a claim occur.
This approach doesn’t just keep premiums in check; it builds trust. Insurers become more than protectors of financial stability but partners in safety, earning their place in the lives of the people they serve. The homeowners insurance crisis could catalyze innovation, collaboration, and the creation of a system that works for the industry and society as a whole. But it won’t be enough to update the offerings, this new “preventive” focus would require work to get industry leaders, employees, and consumers to understand the tradeoffs and benefits and integrate them into a cohesive customer experience.
Futurescape 2: Elevating care while bridging divides
The growing risks of climate change and economic pressures are driving insurers to explore elite, concierge-style offerings for high-income customers, much like the health insurance industry began doing a decade ago. These premium services—such as faster claims resolution, personalized risk consultations, or expedited payouts—promise elevated care but raise important questions about equity, access, and scalability and opens the door for innovative solutions.
For this model to succeed, insurers would have to address the challenge of scaling white-glove service in a way that ensures all customers benefit from improved experiences. This would require leveraging AI and thoughtful experience design to make premium-level service delivery more efficient and widely accessible. By automating repetitive tasks, simplifying complex processes, and empowering employees with intuitive tools, insurers could maintain the high-touch, personalized care expected by premium customers while extending better service across the board.
At its best, this approach could provide a foundation of care and fairness for everyone, offering premium options that enhance, rather than undermine, trust. Achieving this vision, and avoiding stratification, however, would require evolving beyond a soley profit-driven, venture-capital mindset to embrace a broader commitment to customer care and trust. Insurers would need to invest not only in AI and operational efficiencies, but in people and experience design—training case managers, adjusters, and service teams while creating seamless customer journeys that feel personal, regardless of coverage tier.
To this end, there are already some promising things happening within the industry, with companies like Raincoat using parametric insurance, a type of coverage that provides quick payouts when a specific event—like a wildfire—occurs, filling in experience gaps for customers by providing rapid access to funds for early action and recovery.
In 2025, we hope to see:
- Priority services that enhance care without deepening divides, supported by scalable, thoughtfully designed systems.
- Parametric insurance as a standard for emergency relief, ensuring quick payouts and reliable recovery for all.
- Loyalty programs that reward trust and long-term relationships, fostering fairness and inclusivity across income levels.
The challenge for insurers will be scaling innovation and personalization without sacrificing accessibility. Experience design and operational efficiency will be key to delivering the white-glove care expected by some while ensuring universal protections meet the needs of all. The insurers who rise to this challenge could create a more resilient, equitable, and human-centered future.
Futurescape 3: Employees wielding their power to create a better future
The insurance crisis unfolding in Los Angeles is colliding with another existential threat facing the industry: a growing talent shortage. And the two aren’t unrelated. Negative perceptions of insurance aren’t just impacting customers—they’re affecting employees too. Many workers feel unsupported, lacking the technology and tools they need to do their jobs effectively, while also feeling the industry’s reputational fallout, which can affect morale and pride in their work.
This may be especially problematic for Gen Z, who are entering the workforce in increasing numbers and whom the insurance industry desperately needs to attract to fill the gap created by Baby Boomer retirees. As Deloitte has repeatedly found in their studies, Gen Z and Millennials are looking for purpose-driven work that aligns with their values. They also want access to modern tools and technology that enable them to perform meaningful, impactful work efficiently.
To attract and retain these workers, the insurance industry could reimagine itself as not just a business but as a mission-driven force for societal good, empowered by forward-looking innovation and invested in modern tools, transparent communication, and meaningful work, with success measured not just by profitability but by its impact.
What if 2025 marked a turning point? What if employees channel this frustration to fuel ground-up change, pushing organizations to align their work with values like fairness, transparency, and social impact. Beyond better tools and tech, insurers would demonstrate that their work contributes to a safer, more resilient world. This means addressing the real-world impacts of climate change, advocating for underserved communities, and rethinking practices that prioritize short-term profits over long-term stability.
AI could play a key role, but not as a standalone solution. While it can ease administrative burdens and modernize internal systems, the real opportunity might be pairing these advancements with a renewed sense of purpose. Employees—especially younger ones—want to feel their work matters, that they’re part of something bigger than themselves. Insurers who tap into this desire could lead the way in redefining the industry’s image and impact.
In 2025, we hope to see:
- Mission-driven innovation: Insurers positioning themselves as forces for societal good, tackling challenges like climate resilience and financial equity.
- Better tools and technology for employees: AI-powered systems that reduce administrative burdens and allow workers to focus on meaningful, high-impact tasks.
- A shift toward purpose-driven cultures: Empowering employees to advocate for change, ensuring their work aligns with their values and customers’ needs.
The future of insurance depends on its people—both the customers it serves and the employees who make that service possible. By embracing mission-driven work and empowering employees with the right tools and purpose, insurers can create a better future for everyone.
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Coming off of the devastation of the LA fires, it’s understandable to feel despondent about the future of insurance. As one Cake & Arrow designer put it, “I just think my outlook is so negative on this specific topic. Seeing my friends lose their coverage in California is really shit.”
This frustration is real, but it’s also a call to action. Imagining a better future isn’t just hopeful—it’s essential. Together, insurers, customers, and communities have the opportunity to rewrite this story and create a vision of insurance that serves everyone—customers, employees, and society alike.
