A detailed report from Capgemini says in 2023 the global economy proved to be more resilient than initially anticipated. The company expects the insurance industry in 2024 to remain resilient and for growth to accelerate slightly, with an increasing focus on generative artificial intelligence (AI) to reduce costs and improve customer experiences.

“Drastic climate change, natural catastrophes, and global tensions have catalyzed demand for insurance as acute risk awareness prevails,” they write. “This awareness is fuelling demand for life products, particularly around protection. Moreover, an increase in the severity and frequency of loss events, combined with high inflation, is driving carriers to refocus on insurance fundamentals.” 

The report, Insurance Top Trends 2024, goes on to say the industry will likely increase the adoption of cutting-edge technologies. Property and casualty (P&C) insurers are expected to refocus on organic profitable growth, pulling back in multiple markets and seeking rate increases across business lines, while life carriers will accelerate the launch of new products to address aging and higher interest rates.

“Global losses across property and casualty are trending higher and claims costs are on the rise across the industry. We expect these trends to continue, which will maintain upward pressure on rates,” they state. “Life carriers (meanwhile) are grappling with revenue generation and retention challenges, prompting cost-cutting measures such as layoffs.” 

The report addresses inflation – expected to persist at 6.8 per cent in 2023 and 5.2 per cent in 2024 – and discusses growth projections for premiums. (Expected to grow at 1.1 per cent and 1.7 per cent in 2023 and 2024 respectively following a contraction of 1.1 per cent in 2022.) It also looks at insurance technology funding, saying insurtech funding plummeted 50 per cent in 2022. (The firm expects to see a broad-based rebound in funding for insurtech companies.)

“For P&C insurers, in 2023 we highlighted an increasing emphasis on embedded insurance, sustainability and data mastery,” they write. “For life insurance, in 2023, we called attention to wellness, modernization of core systems,” digital tools and cloud adoption. “These trends are maturing and gaining momentum in 2024.”