How digital identity is reshaping insurance in 2025

Considered one of the more traditional sectors among financial services institutions (FSIs), the insurance industry is working hard to adapt to today's digital-first world. From embedded insurance to customer support chatbots to Insurtech, many technologies are transforming the customer journey. Paper-based documentation is gradually making way for digitised insurance processes, and insurance brokers are reassessing their roles as they compete with new digital distribution channels. 

First and foremost, insurance digitisation requires secure and verifiable digital identities that meet mandatory due diligence and Know Your Customer (KYC) requirements. Without them, any meaningful transformation to digital-first operations is unlikely.

Moreover, creating secure digital identity for the insurance industry is increasingly crucial as regulations controlling data management and ICT systems in FSIs in the EU continue to rise, and as cybercrime and security breaches become increasingly sophisticated. 

Below, we share 5 ways in which digital identity tools can support insurance companies in their digital transformation:  

The foundation of digitising insurance processes is having the means to reliably conduct identity verification and KYC when onboarding clients. This is especially crucial as cybercrime and fraud are on the rise. Relying on verified digital identity automates KYC in insurance, speeding it up and enhancing the accuracy of fraud detection in insurance claims.

There are several certified and regulated digital identity platforms that insurance companies can rely on to digitise KYC and due diligence processes. Digital ID platforms also help insurers streamline compliance with regulatory requirements. This way, insurers can keep their focus on their core operations without the added complexity of staying up to date with evolving regulations or managing data storage and security. 

• First, digital identity platforms vary in the range of services that they cover, from identification and authentication to qualified e-signature and data sharing, among others. Being a highly regulated industry, however, insurance will benefit from digital identity tools that cover as many applications as possible (such as itsme^®).

• Insurers also need to consider the certifications that each digital ID platform has (e.g. ISO standards or eIDAS compliance), the regulations that they comply with (e.g. GDPR, PSD2), and where they store their data.

• Last but not least, digital identity platforms differ in their compatibility with existing workflows, which influences how they are adapted, integrated, and scaled.

Learn more about itsme^® digital identity platform

Insurers often request paper-based documents to process claims, such as signed medical reports, invoices and passport scans. This is done to ensure authenticity of the evidence and for insurance claim fraud detection. However, relying on physical evidence gets in the way of digitisation, and all the enhanced trust and speed it can bring the insurance sector.

Digital identity platforms provide secure digital authentication, reducing the need for paper-based identity verification. Multifactor authentication in insurance significantly lowers the risk of fraud during digital interactions, as it is generally more resistant to phishing and credential theft than traditional methods like passwords or one-time passcodes (OTPs). Additional features such as digital signatures and secure data sharing capabilities further reduce the reliance on physical documents.

Insurance leader AXA has partnered with digital identity app itsme^® to enable its customers to access their insurance contracts, submit claims, and track the progress of their claims directly from their smartphones. Using itsme^®, AXA eliminates the need for passwords or eID card readers, without compromising on security. This also helps AXA, reduce costs associated with paperwork and manual processing, while increasing transparency throughout the claims process. 

Continue reading: Insurance digitalisation in Europe: Top 5 trends to watch in 2025

To transition to digitised operations, insurance companies need to ensure digitising two key applications: signature and authentication. These processes are essential for enabling a completely digital policy and document management system.  

Digitally signing new policies and insurance certificates requires choosing the right type of e-signature, since not all e-signatures offer the same level of security and legal recognition. Qualified e-signatures (QES) provide the highest level of security and holds the same legal value as a traditional handwritten signature.  

itsme^® stands out as one of the few digital identity platforms that offer QES alongside a full suite of identification and verification services. Partners in insurance using itsme^®’s QES services include AG Insurance, AXA Assistance, NN Insurance Belgium, and others.    

Authenticating clients digitally enables insurance customers to securely modify policies, authorise policy changes or cancellations, and access policy documents and other official records. Digital authentication safeguards these actions with passwordless login that relies on multi-factor authentication. This offers a higher level of security compared to two-factor authentication using one-time passcodes (OTPs), and gives customers more control without the need to involve customer support agents.

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Digital ID platforms further enhance the security of online payments in insurance and expand their scope, from authenticating premium payments and verifying claim payouts, to setting up or modifying payment arrangements.  

By authenticating insurance payments through multi-factor, passwordless logins, digital identity platforms add an extra layer of security, helping insurance companies integrate online payments with very minimal fraud risk. This is because passwordless authentication is much more secure against account take overs (ATO), credential stuffing, identity theft, and other types of fraud.

Digital ID platforms help insurance companies eradicate costly and time-consuming physical processes with digitisation, enable them to utilise the legal instruments prepared by the European Commission to empower the EU Digital Decade.

Digital identity tools can help European insurance companies comply with key regulations such as eIDAS, GDPR and Digital Operational Resilience Act (DORA), by providing secure, verifiable identity management and data protection.  

For instance, by employing highly secure authentication methods and minimising data exposure through multi-factor verification, digital identity platforms enable compliance with GDPR principles of data minimisation, user consent, and secure data processing. 

Moreover, digital identity solutions support compliance with the (DORA) by ensuring robust authentication and authorisation processes that maintain secure and reliable digital operations. To learn more, visit the dedicated blog we created about DORA compliance for insurance.

Lastly, electronic identification (eID) platforms that also provide qualified electronic signatures help insurance companies to comply with Electronic Identification, Authentication and Trust Services (eIDAS) by ensuring legally binding agreements and compliant transactions across the EU.

Learn more about the role of digital identity in the insurance sector

While their road to abandon analogue procedures and paper-based evidence is still long, insurance companies can already make use of specialised digital identity tools to digitise, secure, and significantly speed up client verification and KYC processes. Some of those tools, such EU-based itsme^®, also integrate an array of other services, such as authentication, qualified e-signature, and secure data sharing.