AI Revolution Transforms Global Insurance Sector

Last week witnessed a wave of significant developments across the global insurance industry, where rapid technological innovation, slowing premium growth, and high-profile corporate activities converged to reshape market dynamics. These factors are increasingly influencing investor sentiment and compelling insurers to rethink strategic priorities.

According to a recent report by Business Research Company, the market for generative artificial intelligence (AI) within insurance is projected to reach USD 1.4 billion by 2025. Analysts predict a compound annual growth rate (CAGR) of approximately 28.5% from 2025 to 2030, potentially expanding the market to USD 4.8 billion by the decade’s end. Insurers are deploying AI to optimise underwriting processes, streamline claims management, and enhance customer service, signalling the onset of a broad digital transformation within the sector.

Despite these technological advances, the industry faces financial pressures. Deloitte’s Global 2026 Insurance Outlook indicates that following several years of robust growth, non-life insurance premium growth is expected to slow, as competitive pressures and constrained rate increases compress profit margins. This trend creates a delicate balance between innovation and financial stability, challenging insurers to maintain resilience while investing in new technologies.

From a regulatory perspective, the International Association of Insurance Supervisors (IAIS) has noted that insurers globally remain financially sound, supported by strong capital bases, liquidity, and profitability. However, IAIS cautions that expansion into personal credit, regional market fragmentation, and rapid AI adoption introduce new risks, requiring enhanced supervisory oversight.

The corporate landscape also saw notable activity last week. Zurich Insurance Group raised its acquisition offer for Beazley plc to 1,280 pence per share (USD 17.15), while Philippine digital wallet GCash launched GLoan Protect, offering free loan and health insurance for loans exceeding USD 8. Additionally, Lockton increased its ownership in Lockton Sime Insurance Brokers, becoming the primary shareholder from 31 December 2025.

Weekly Corporate Highlights

Last week’s developments highlight a dual transformation in insurance: the acceleration of AI- and fintech-driven technological change, alongside persistent pressure on premiums and profitability. The industry is navigating this shift with caution, seeking to harmonise innovation with financial prudence to secure long-term sustainability.