Executive Summary
The insurance industry continues to navigate a complex landscape in Spring 2025, with significant developments across multiple sectors. Arthur J. Gallagher's proposed $13.45 billion acquisition of AssuredPartners is facing regulatory scrutiny, while other notable transactions continue reshaping the competitive environment.
Meanwhile, artificial intelligence implementation continues to accelerate across the industry, with 78% of insurance leaders planning to increase tech spending in 2025. Wisconsin has officially become the 24th state to adopt the NAIC Model Bulletin on the Use of Artificial Intelligence Systems in Insurance, signaling increased regulatory attention to this transformative technology.
The Rise of Embedded Insurance
The embedded insurance market is experiencing explosive growth in 2025, revolutionizing how insurance products are delivered to consumers. The global market is expected to grow from $210.9 billion in 2025 to $950.59 billion by 2030 — a compound annual growth rate of 35.14%.
According to industry surveys, 94% of insurance executives view embedded insurance as critical to their future strategies. Data shows that offering insurance at the point of sale can increase purchase intent by as much as 25%.
What is Embedded Insurance?
Embedded insurance integrates coverage directly at the point of sale of other products or services, eliminating additional steps for consumers while providing protection exactly when and where it's needed:
- When purchasing a new smartphone, consumers can immediately add device protection
- When booking travel, they can secure trip insurance with a single click
- When buying a vehicle, they can obtain auto coverage as part of the same transaction
The trend is particularly strong in mobility and transportation, with bicycle and e-bike insurance seeing significant adoption. Pet insurance is another rapidly growing segment within the embedded insurance ecosystem.
Wisconsin insurers are beginning to explore this distribution channel, with several partnerships forming between local insurance providers and retailers, auto dealerships, and travel agencies.
Wisconsin Market Update
Wisconsin Adopts NAIC AI Bulletin
Following Insurance Commissioner Nathan Houdek's March 18, 2025 bulletin on "The Use of Artificial Intelligence Systems in Insurance," Wisconsin has officially become the 24th state to adopt the NAIC Model Bulletin on the Use of Artificial Intelligence Systems by Insurers.
This regulatory guidance establishes clear expectations for Wisconsin insurers regarding responsible AI use, emphasizing transparency, fairness, and consumer protection in automated decision-making processes.
Wisconsin Auto Insurance: Finally Stabilizing
Wisconsin rates remain substantially lower than the national average of $2,435 for 2025. Several factors contribute to Wisconsin's comparatively lower rates:
- Geography: Fewer extreme weather events compared to hurricane-prone states or wildfire-affected regions
- Demographics: Rural and suburban landscape with lower traffic density
- Regulation: Effective regulatory oversight by the OCI
OCI Enforcement Actions
The Wisconsin Office of the Commissioner of Insurance continued its active regulatory enforcement, publishing monthly administrative actions. Any forfeitures paid are deposited in Wisconsin's Common School Fund, which distributes earnings to all public K-12 schools in the state for purchasing library materials.
Emerging Technology Trends
The Rise of "Agentic AI"
Industry experts are highlighting the emergence of "agentic AI" in 2025. Unlike previous AI implementations that respond to prompts, agentic systems work proactively on their own initiative, potentially increasing productivity and reshaping core insurance functions.
AI adoption is expected to climb, with agentic AI platforms becoming essential for handling complex tasks independently alongside human workers, redefining workflows and client interactions.
Parametric Insurance Growth
Parametric insurance is addressing the widening protection gap in property insurance. Instead of compensating for assessed losses, parametric coverage pays based on predefined triggers like specific weather conditions, offering:
- Transparency in coverage terms
- Rapid settlements without lengthy claims processes
- Specialized coverage for rainfall and flood events
M&A Activity Continues
M&A activity in the insurance sector remained robust in Spring 2025:
- Risk Strategies acquired GMC Advisors, LLC., a Houston-based specialist in commercial lines
- Ryan Specialty agreed to acquire certain assets of USQRisk Holdings, LLC
- Inszone Insurance Services acquired Davidson Insurance Agency Group, LLC
- The Ardonagh Group acquired SRB Assekuranz Broker AG
Regulatory scrutiny continues for Arthur J. Gallagher's proposed $13.45 billion acquisition of AssuredPartners, with the company receiving a second request for information from federal officials.
Industry Events
Odd Claims Corner: The Drone Drama Insurance Debacle
In what might be the most technologically peculiar insurance case of early 2025, a suburban Milwaukee homeowner found themselves in a bizarre dispute with their insurance company over what appeared to be a drone hovering over their property.
Theodore Kowalski received an unexpected non-renewal notice from his homeowners insurance carrier after more than 18 years as a customer. The stated reason? "Unacceptable property maintenance conditions" observed through "property surveillance imaging."
After hiring an independent property inspector who certified his home was in excellent condition, Kowalski's tech-savvy teenage daughter suggested they set up a camera to catch the insurance drone in action. After two weeks of surveillance, they recorded a drone hovering over their property—but it wasn't from the insurance company. It was operated by their neighbor's 12-year-old son, practicing drone photography.
The most remarkable twist? The "evidence" used by the insurance company wasn't drone footage at all, but satellite imagery from a third-party provider that had mistakenly identified his neighbor's construction debris pile as being on Kowalski's property.
The Wisconsin OCI has since announced it is reviewing industry practices regarding property surveillance and considering new regulations requiring greater transparency when insurers use aerial or satellite imaging for underwriting decisions.
As for Kowalski, he's now shopping for a new insurance provider—and considering investing in a drone of his own, "just to keep things fair."
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