As 2024 draws to a close, it’s a good time to reflect on what the insurance industry achieved, what surprised us, and how longer-term trends progressed.
Strong Industry Performance in 2024
From an industry results perspective, 2024 was a strong year. Buoyed by rate increases and continued (but dwindling) interest rates, carriers saw global insurance premiums grow by 4.6% in 2024, outperforming the 1.6% average of the past five years.
- Life Insurance Growth: Life insurance led the way with a decade-high 5% growth in 2024.
- Non-Life Premiums: Non-life premiums grew by 4.3%, up from the 3.1% CAGR of the last five years, largely due to the impact of the hard market.
Life and non-life premiums accounted for 43% and 57% of total premiums in 2024, respectively. Steady economic growth and flexible labor markets continued to support the industry.
AI Drives Profitable Impact in Insurance
As reported by C-suite executives surveyed globally by Accenture, 87% of insurers (91% in Property & Casualty; 82% in Life & Annuity) achieved material financial benefits from applying AI.
- Enhanced Underwriting and Claims Settlement: The industry has successfully monetized AI-driven results for enhanced underwriting and claims processing.
- Scaling AI Impact: The challenge now is achieving “impact at scale,” moving from isolated use cases to a broader impact across value chain disciplines.
Addressing Talent Shortages in Core Functions
The underwriting function, long plagued by an aging workforce and outdated processes, saw relief in 2024 through AI advancements.
- QBE Leading the Way: QBE scaled AI-powered underwriting solutions across multiple business lines, allowing senior underwriters to focus on high-value tasks.
- Global Talent Strategies: Insurers and reinsurers addressed regulatory and capital requirements by sourcing actuarial, loss modeling, and capital allocation resources from lower-cost talent pools in regions like India.
Optimizing Operating Models and Business Growth
Cost reduction efforts led to significant changes in operating models in 2024.
- Decentralized Approaches: Insurers reduced reliance on centralized corporate structures, opting for strategic realignments to emphasize customer and product-focused leadership.
Shifts in Risk Landscape Fuel Cross-Sector Growth
Recognizing growth opportunities in health sectors, insurers diversified their offerings and targeted emerging health risks.
- Innovative Health Insurance: Aviva Insurance Ireland supported Level Health to provide lower-cost plans.
- Gaming-Related Health Coverage: FWD Group introduced insurance solutions for gaming-related risks in the Philippines.
- Digital Health Growth: The global digital health market grew by 16% to $172 billion, spurred by demand for remote care and telehealth services.
Retirement and Pension Reforms Take Center Stage
Concerns about life risk and retirement readiness drove major changes in 2024.
- Global Pension Reforms: China introduced private pension accounts to ease systemic stress on its public system.
- FIRE Movement: Millennials increasingly embraced the Financial Independence, Retire Early (FIRE) movement, influenced by the Great Wealth Transfer.
Prevention Mindsets Boost Service Revenue
The industry witnessed a growing emphasis on risk prevention as a key strategy.
- Vehicle Safety: 90% of new vehicles in the U.S. now include standard automatic braking systems, contributing to a 17% increase in the global advanced driver assistance systems market.
- Health Prevention: Initiatives like John Hancock’s partnership with Prenuvo offered discounted cancer screening and MRIs, enabling early detection and mitigation of health risks.
Looking Ahead to 2025
As we move into 2025, there’s reason for optimism. The insurance industry continues to operate from a position of strength, ready to embrace new opportunities and challenges.