Insurers are going through an era of considerable uncertainty arising from economic pressures, geopolitical volatility and increasing frequency and severity of catastrophic events, doubled by higher customer expectations, according to the Deloitte 2026 global insurance outlook. In order to effectively manage costs while adapting their operating models, insurers are accelerating digitalization, which requires investments in technological modernization, organizational flexibility and the skillful combination of technology with human capital, the study shows.
After years of stable market and high premiums, many segments are entering a slowdown amidst growing cost pressures. For instance, the non-life insurance segment, which reported 4% global premiums increase in 2024, is forecasted to reach only 2.3% growth in 2026. In the life insurance segment, premiums growth is also expected to fall from 6.1% in 2024 to 2.4% in 2026 on a global level. In Europe, the life premiums growth rate was 4.9% in 2024 and is forecasted to decrease to 1.7% in 2026.
After peaking in 2024, group insurance segment growth is expected to slow over the next few years, but demand for products that address new employee needs is growing, such as health insurance (including mental health) and pet insurance. As the workforce now comprises five generations, insurers need to offer additional benefits and products better tailored to employees' professional and demographic profiles, the study explains. Portfolios could include new types of benefits such as elder care, in-office daycare options, and even support for adoptions.
With such high global uncertainty and external pressures, insurers’ competitiveness will increasingly rely on more agile capital models that ensure diversification of risks to manage volatility - for instance, retained risk combined with third-party reinsurance -, according to the study, and collaborative financing structures that enable them to transfer a portion of risk to capital markets, and, thus, improve capital flexibility, broaden capital base, and strengthen resilience against large-scale losses.
This type of financial and investment cooperation is just one pillar of the sector's transformation, the study highlights. At the same time, insurers are intensifying their digitalization efforts, recognizing that competitive advantage increasingly depends also on the quality of customer relationships, improved risk management and more efficient internal processes. Cloud infrastructure, API connectivity, IoT devices, and AI are among the most frequent innovation and technology uses. Drones for roof inspections, satellite imagery for catastrophe triage, and Internet of Things sensors for real-time monitoring are already enabling insurers to predict and minimize losses across business lines.
When it comes to AI, despite a varied pace of adoption and implementation, most insurance leaders now focus on practical AI use cases in various areas. For fraud detection, insurance providers deploy AI technologies to spot claims fraud, including the use of machine learning to detect anomalies in filed claims. The Deloitte study estimates that by deploying AI-driven, real-time fraud analytics, non-life insurers could save up to US$160 billion by 2032. Underwriting is another area that can benefit from artificial intelligence, as AI-assistants can ingest and prioritize excess submissions, allowing review of additional policies without adding new staff. Customer engagement is one of the areas in which numerous insurers have been using AI, through virtual assistants. Main obstacles in realizing AI value are fragmented data and outdated systems, according to the study.
“Financial reporting is another area which could be significantly optimized through digitalization. After the 2023 milestone, when insurers had to adopt international financial reporting standards IFRS 17, which changed the way assets and liabilities are assessed and presented in the financial statements, they now have the chance to leverage advanced digital tools and data analytics in order to streamline reporting workflows and produce high-quality reporting outputs. Technological advancements not only support compliance with evolving financial standards but also empower insurers to deliver greater insights and value to their stakeholders,” stated Claudiu Ghiurluc, Audit and Assurance Partner, Deloitte Romania.
As far as technology is concerned, the real challenge is combining technological modernization with creating an environment where employees can use data and digital tools in their daily work, the study highlights. Insurers need to build an environment where employees understand the capabilities and limitations of technology, and the organization can wisely combine automation with human intuition and perspective in decision-making, customer service and risk assessment.
Insurers also face structural pressures, such as broker consolidation, which increases the latter’s negotiating power, and alternative risk players which are entering the market.
“Globally, independent brokers account for more than half of retail life insurance sales and generate 83% of business in the workplace benefits industry, the study shows. But the distribution transformation is in progress and insurers are looking for innovative ways to stand out. Strategic partnerships and alliances are a solution that can strengthen insurance providers’ financial stability and provide revenue-generating opportunities through the development of services complementary to traditional insurance products,” stated Ana Serban, Actuarial and Insurance Solutions Director, Deloitte Romania.
Insurers are increasingly establishing collaborative networks encompassing entities from various industries, allowing them to expand their offerings, increase operational flexibility, and respond more quickly to customer needs. For instance, insurance companies can develop partnerships with home care and other wellness providers to provide fee-based services that complement their traditional product and service portfolios. Or life insurance companies can partner with telecommunication operators to offer micro-life insurance products, the study indicates.
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