Core Insights - The global insurance industry is entering a phase of slowed growth and profit pressure, moving away from a decade driven by scale [6][8] - External factors such as economic fluctuations and geopolitical tensions continue to impact traditional profit models, while climate change poses significant risks to property insurers [6][8] - The competitive landscape is shifting from a focus on licensing and scale to one centered around technology, capital, and service capabilities [8][35] Non-Life Insurance Sector - The non-life insurance sector is facing a new pressure phase after exiting a difficult underwriting cycle, with global premium growth expected to slow down [10] - The underwriting cost ratio in the U.S. is projected to rise from 97.2% in 2024 to 99% in 2026, further compressing profit margins [10] - Factors driving cost increases include tariffs, supply chain disruptions, labor shortages, and rising material prices, particularly affecting auto and property insurance [10][11] - Legal risks are increasing complexity in non-life insurance, with rising litigation financing leading to higher claims rates and severity [10] Life and Annuity Insurance - Life insurance premium growth is slowing in developed markets, while annuity sales in the U.S. are expected to reach $432.4 billion in 2024, continuing strong growth [13] - The asset management size in the insurance industry is projected to grow by 25% to $4.5 trillion by 2024, with personal credit becoming a larger share [14] - The integration of private equity into the insurance sector is accelerating, reflecting dual pressures on both asset and liability sides [15][16] Group Insurance Sector - The group insurance sector is evolving towards a tighter integration of employee benefits and insurance services, with new growth areas emerging [20] - The B2B2C model in group insurance emphasizes the importance of user experience for both employers and employees [21] - Digital access capabilities are becoming critical in group insurance competition, with companies needing to integrate products into employer benefit platforms [23] AI and Technology Integration - The report highlights that the main barrier to scaling AI in the insurance industry is not the algorithms but rather data quality and system infrastructure [26][29] - Successful AI applications are being implemented across various functions, such as underwriting and claims processing, enhancing efficiency and service delivery [30] - The future insurance workforce will need to focus on complex problem-solving and customer engagement rather than routine tasks [30] Customer Experience Transformation - Customer expectations are shifting towards speed, convenience, and personalization, necessitating a move from "omni-channel" to "channel adaptation" [33] - Insurers must provide seamless service experiences, with simple requests directed to self-service channels and complex inquiries handled by experienced professionals [33] - The overall competitive structure of the insurance industry is being redefined, with technology, capital flexibility, and customer-centric service systems becoming key competitive factors [35]

Core Insights - The global insurance industry is entering a phase of slowing growth and profit pressure, moving away from a decade driven by scale [1] - The competitive paradigm is shifting from reliance on licenses and channels to a focus on technology, capital, and service capabilities [2] Non-Life Insurance Sector - The non-life insurance sector is experiencing a "tech war" focused on technology and cost evolution, with global premium growth expected to slow down [3] - The underwriting cost ratio in the U.S. is projected to rise from 97.2% in 2024 to 99% in 2026, further compressing profit margins [3] - Factors driving cost increases include tariffs, supply chain disruptions, labor shortages, and rising material prices, particularly affecting auto and property insurance [3] - Legal risks are increasing complexity in non-life insurance, with third-party litigation financing spreading to various markets, raising claims rates and severity [3][4] Life Insurance and Annuities - Life insurance premium growth is slowing in developed markets, while annuity sales in the U.S. are expected to reach $432.4 billion in 2024, with strong growth continuing into 2025 [6] - The insurance industry's managed asset scale is projected to grow by 25% to $4.5 trillion by 2024, with personal credit's share increasing to 21.1% [7] - The integration of private equity into life insurance reflects dual pressures on both asset and liability sides [8] Group Insurance Sector - The group insurance sector is evolving towards a "B2B2C" experience, with new growth in niche areas like workplace childcare support and gig economy insurance [13] - The competitive edge in group insurance is increasingly determined by the ability to provide an exceptional end-user experience [14] Technology and AI Integration - Technology is becoming crucial for enhancing actuarial capabilities and controlling claims costs, with applications like generative AI and IoT being implemented [5] - AI is being used to automate underwriting and claims processes, significantly improving efficiency without expanding workforce [17][19] - The insurance industry faces a talent shortage in professionals who understand both insurance and data science, necessitating a strategic transformation in talent management [21] Customer Experience and Service Transformation - Customer expectations are shifting towards seamless service characterized by speed, convenience, and personalization [22] - The transition from "omni-channel" to "channel adaptation" reflects a need for intelligent guidance based on customer intent and business complexity [22] - Companies like Cigna are linking employee compensation to service metrics to enhance service culture, supported by technology [22] Structural Changes in the Insurance Industry - The long-standing reliance on scale, products, and channels is being replaced by new competitive structures focused on technology, capital flexibility, and customer value [24] - The insurance industry is facing a structural transformation that will redefine competition over the next decade, with leading firms likely to integrate technology development, customer experience design, and platform ecosystem capabilities [24]

Introduction - The report by Deloitte analyzes the major trends, challenges, and opportunities facing the global insurance industry by 2026, highlighting the impact of economic volatility, geopolitical instability, and natural disasters on the market [1][29]. Property and Casualty Insurance (P&C) - The global premium growth in P&C insurance is expected to slow down due to intensified market competition and weakened rate growth, with emerging markets particularly affected by economic slowdowns [2][32]. - Advanced technologies like AI and geospatial analysis are aiding insurers in accurately predicting and minimizing losses across various insurance types [3][37]. - Insurers are encouraged to adopt agile capital strategies, utilizing third-party reinsurance and catastrophe bonds to enhance capital flexibility [4][36]. Life and Annuity Insurance (L&A) - Global life insurance growth is slowing, particularly in developed markets, while emerging markets present growth opportunities due to expanding middle-market segments [5][38]. - Annuity products are experiencing strong growth, with sales expected to reach $432.4 billion in 2024, driven by innovative product offerings and strategic alliances with alternative asset management firms [6][40]. - Insurers are forming partnerships to diversify revenue streams and enhance traditional product offerings, particularly in non-traditional service areas [6][43]. Group Insurance - Group insurance growth is projected to slow due to tightening labor markets and rising healthcare costs, impacting traditional employer-sponsored benefit plans [7][47]. - Insurers are introducing innovative products that integrate annuities into retirement benefit plans to meet diverse workforce needs [8][49]. - Digital interaction capabilities are essential for insurers to provide seamless service experiences and connect effectively with employer platforms [9][50]. AI Success Factors - Insurers must focus on data quality, system modernization, and security to successfully implement AI applications [10][53]. - Modernizing legacy systems and establishing robust data management practices are critical for integrating AI into business operations [11][55]. - A strong emphasis on cybersecurity and the selection of reliable third-party vendors is necessary to maintain customer trust and protect sensitive data [12][59]. Human-Machine Collaboration - Successful digital transformation in the insurance industry hinges on effective human-machine collaboration, requiring a reevaluation of employee skills and the creation of a modern employee value proposition [13][61]. - Companies need to attract and retain talent capable of adapting to evolving roles and leveraging AI tools effectively [14][63]. Enhancing Customer Experience - A customer-centric approach that integrates digital and human service touchpoints is vital for delivering empathetic and seamless service experiences [15][20]. - Insurers should adapt service channels based on customer intent and behavior to improve satisfaction and reduce service costs [16][20]. Policy Implications - The "One Big Beautiful Bill Act" introduces tax incentives and regulatory uncertainties that insurers must navigate to ensure compliance and capitalize on potential benefits [17][18]. - Insurers need to establish data collection processes to meet compliance requirements related to tax modeling and reporting [18][18]. Strategic Collaboration - Building strategic networks with technology providers and reinsurers is essential for sharing risks and developing innovative products and services [19][19]. - Insurers should prioritize customer needs and integrate digital and human service channels to enhance overall service delivery [20][20]. Digital Foundation - Investment in data quality and core system modernization is crucial for scaling AI applications and fostering a culture of innovation within the industry [21][21].