Deloitte Study: Uncertainty caused by economic, geopolitical and catastrophic events, as well as higher customer expectations will accelerate the digitization of the insurance sector in 2026
Globally, insurers are going through a period of considerable uncertainty caused by economic pressures, geopolitical volatility and increasing frequency and severity of catastrophic events, compounded by higher customer expectations, according to the study Deloitte 2026 Global Insurance Outlook. To effectively manage their costs in the context of adapting operating models, insurers are accelerating the digitalization process, which requires investments in technological modernization, organizational flexibility and the skillful combination of technology and human capital, the study shows.
After a marked period of stability in the insurance market, doubled by an increase in written premiums, many insurance segments are entering a phase of slowing growth amid increasing cost pressures. For example, the non-life insurance segmentwhich reported a 4% global increase in written premiums in 2024, is estimated to have an increase of only 2.3% in 2026. In the segment life insurancegrowth in written premiums is also expected to decline from 6.1% in 2024 to 2.4% in 2026 globally. In Europe, the growth rate for life insurance was 4.9% in 2024 and is expected to decrease to 1.7% in 2026.
After peaking in 2024, the group insurance segment will see lower growth over the next few years, but demand is increasing for products that meet new employee needs, such as health (including mental health) and pet insurance. As the workforce now consists of five generations, insurers need to offer additional benefits and products better suited to the occupational and demographic profiles of employees, the study explains. Portfolios can include new types of benefits such as aged care, on-site daycare options and even support for adoptions.
In the context of such high levels of global uncertainty and external pressures, the competitiveness of insurers will increasingly rely on more agile capital models that provide risk diversification to manage volatility – for example, insurer retained risk combined with third-party reinsurance –, according to the study, and on collaborative financing structures that allow them to partially transfer risk to the capital markets and thus secure capital with greater flexibility, broaden their base of capital and improve its resilience in the event of large-scale losses.
This type of financial and investment cooperation is only one of the pillars of the transformation of the insurance sector, the study points out. At the same time, insurers are stepping up digitization effortsrecognizing that competitive advantage increasingly depends on the quality of customer relations, better risk management and the efficiency of internal processes. Cloud infrastructure, API connections (application programming interface), IoT devices (Internet of Things) and artificial intelligence (IA) are among the most common innovations and uses of technology. Drones for roof inspections, satellite imagery for disaster triage, and IoT sensors for real-time monitoring already enable insurers to predict and minimize losses across all lines of business.
As regards artificial intelligencedespite a varying pace of adoption and implementation, most insurance company leaders are now focusing on practical AI use cases in various departments. For example, for fraud detectioninsurers are deploying AI technologies to identify attempted fraud in claims, including using machine learning to detect anomalies in the claims submitted by the insured. The Deloitte study estimates that by implementing AI-based solutions that detect fraud attempts in real time, non-life insurers could save up to $160 billion by 2032. And insurance departments subscription can benefit from AI as AI assistants can process and prioritize high volumes of claims, allowing more policies to be checked without adding new staff. Customer relationship is one of the areas where many insurers are using AI, through virtual assistants. The main obstacles to the effective use of AI are fragmented data and outdated systems, according to the study.
“Financial reporting is another area that could be significantly optimized through digitization. After the key moment in 2023, when insurers had to adopt the international financial reporting standards IFRS 17, which changed the way assets and liabilities are valued and presented in financial statements, they now have the chance to leverage advanced digital tools and data analysis to streamline reporting workflows and prepare high-quality reports. Technological innovations not only support efforts to comply with ever-evolving financial standards, but also provides insurers with the opportunity to provide more relevant financial and operational information stakeholder them,” he declared Claudiu Ghiurluc, Partner, Audit and Related Services, Deloitte Romania.
In terms of technology, the biggest challenge is combining technological modernization with creating an environment in which the employees can use data and digital tools in their daily work, the study points out. Insurers need to build an environment where employees understand the capabilities and limitations of technology and where the organization blends automation with intuition and human perspective in decision-making, customer support and risk assessment.
Insurers also face structural pressures such as consolidation of brokerage firmsevolution that increases the bargaining power of the latter, and with non-traditional players (alternative risk players) that enter the market.
“Globally, independent brokers generate more than half of life insurance sales to individual customers and 83% of employer benefits revenue, the study found. But the transformation of insurance distribution channels is underway, and insurers are looking for innovative ways to differentiate themselves. Strategic partnerships and alliances are a solution that can strengthen the financial stability of insurance providers and provide new sources of revenue by developing complementary services to traditional insurance products,” he declared Ana Şerban, Director Actuarial and Insurance SolutionsDeloitte Romania.
Insurers are increasingly developing collaborative networks that span entities from various industries, enabling them to expand their offerings, increase operational flexibility and respond more quickly to customer needs. For example, insurance companies can develop partnerships with home care providers and other providers the Wellness to provide fee-based services that complement their traditional product and service portfolios. Life insurance companies can also partner with telecom operators to offer micro-life insurance products, the study also indicates.
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Article supported by Deloitte Romania
