Executive Summary
The insurance industry continues to navigate a complex landscape in March 2025, characterized by technological innovation, regulatory shifts, and evolving consumer expectations. This month has seen significant merger and acquisition activity, with several major deals reshaping the competitive landscape.
- 78% of insurance leaders planning to increase tech spending in 2025
- 9.5% P&C premium growth, outpacing GDP
- $13.45 billion — Gallagher's proposed AssuredPartners acquisition
- $100+ billion in worldwide insured losses from natural catastrophes
Wisconsin Regulatory Developments
Commissioner Houdek Issues AI Bulletin
On March 18, 2025, Insurance Commissioner Nathan Houdek issued a significant bulletin on "The Use of Artificial Intelligence Systems in Insurance," addressing the growing implementation of AI technologies across the industry. This regulatory guidance establishes expectations for Wisconsin insurers regarding responsible AI use, emphasizing transparency, fairness, and consumer protection in automated decision-making processes.
Wisconsin's regulatory environment continues to evolve alongside consumer protection initiatives. Governor Tony Evers announced on February 18, 2025 that Wisconsin aims to become "the first state in America to start auditing insurance companies over denying healthcare claims," signaling increased scrutiny of claims handling practices.
Wisconsin Health Insurance Changes
The Wisconsin Group Insurance Board has set premium rates for 2025, with significant changes affecting state employees and participants in state health plans:
- Health insurance premiums will increase by 7.3% for the state program and 11% for the local program
- Several plan design changes were approved effective January 1, 2025, including expanded lifetime limits for orthoptic eye training
- Dean Health Plan-Prevea360 West and Mayo Clinic has been rebranded as Dean Health Plan-Medica West and Mayo Clinic Health System
- Thirteen new counties have been designated as State Maintenance Plan (SMP) counties
Premium Trends & Market Analysis
The U.S. insurance market is experiencing steady growth across most sectors in March 2025, though with notable variations by line of business:
Personal Lines P&C
Premiums have increased by 9.5% to approximately $1.1 trillion, outpacing nominal GDP by half a percentage point. However, affordability remains a significant concern, particularly due to rising underlying asset prices, increased repair costs, and higher frequency of damage in areas exposed to physical risks.
Life and Health
Premium forecasts indicate moderate growth with an expected 2.7% annual premium increase in 2025 and 2026, driven largely by demographic shifts and increased consumer awareness of protection needs.
Commercial Lines
Commercial insurance prices are likely to remain elevated throughout 2025 due to the ongoing impact of natural disasters and geopolitical risk. Specialized lines such as cyber insurance continue to see significant premium increases as attacks become more sophisticated.
Mergers & Acquisitions Activity
M&A activity in the insurance sector has been particularly robust, continuing the trend from late 2024. Notable transactions this month:
- Arthur J. Gallagher & Co. received a second request for information from federal officials relating to its proposed $13.45 billion acquisition of AssuredPartners, indicating regulatory scrutiny
- Gallagher also signed a definitive agreement to acquire Woodruff Sawyer for $1.2 billion
- World Insurance Associates LLC acquired Royalty Insurance Services in Van Nuys, California
- Zurich Insurance Group agreed to acquire a minority stake in Icen Risk
- MS&AD Insurance Group announced plans to merge Mitsui Sumitomo Insurance and Aioi Nissay Dowa Insurance
The drivers behind this active M&A environment include stabilization of interest rates, a likely reduction in regulations following recent U.S. elections, and private equity firms having a backlog of exits.
AI Implementation in Insurance
According to a recent survey of 120 leaders at insurance carriers, agencies, and tech firms, 78% said their organizations planned to increase budgets for tech spending in 2025, with AI garnering the largest share (36%) of experts identifying it as the top tech innovation priority.
Climate Risk & Natural Catastrophes
For the first time in six years, worldwide insured losses from natural catastrophes surpassed $100 billion, with many weather events occurring in places where they are not common occurrences.
Hurricanes Helene and Milton in 2024 demonstrated the diversity of catastrophic events:
- Helene: Primarily inland flood damage with loss estimates of $6-12 billion
- Milton: More of a wind event with loss estimates of $15-30 billion
NAIC 2025 Priorities
The National Association of Insurance Commissioners announced its 2025 federal legislative and regulatory priorities, including:
- Elimination of the Federal Insurance Office (FIO) — The NAIC argues it "stands in direct conflict with the states' role as primary regulators"
- Natural catastrophe resilience — Calling for Congress to promote community-based resilience and mitigation efforts
- Extension of enhanced ACA subsidies before they expire at year-end
Odd Claims Corner: The Bear Suit Insurance Scam
In what might be the most creative insurance fraud scheme of early 2025, four Los Angeles residents were arrested in a case investigators dubbed "Operation Bear Claw."
The suspects allegedly attempted to defraud three insurance companies of nearly $142,000 by claiming that a wild bear had damaged their luxury vehicles, including a 2010 Rolls Royce Ghost, a 2015 Mercedes G63 AMG, and a 2022 Mercedes E350.
Their elaborate scheme unraveled when investigators noticed something suspicious about the video evidence. Upon closer inspection, what appeared to be a wild bear was actually a person wearing a bear costume.
The California Department of Insurance enlisted a biologist from the Department of Fish and Wildlife, who reviewed the footage and confirmed it was "clearly a human in a bear suit." When authorities executed a search warrant, they discovered the bear costume—complete with brown fur, a bear-shaped head, paws, and metal hand tools used to simulate claw marks.
"Insurance fraud affects all Californians through higher premiums," said Commissioner Ricardo Lara. And while bears might be known for their honey pots, these suspects will now have to face the consequences of getting caught with their paws in the insurance cookie jar.
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