The European insurance industry stands on the brink of a seismic shift. Once lauded for its resilience and predictability, the sector is now contending with sweeping disruption that challenges its very foundation. In a newly released report, “Accelerating Insurance Transformation,” PwC unveils sobering insights into how insurers across Europe are grappling with the forces of change — and how few are truly prepared.
Disruption and Decline: A Wake-Up Call for Insurers
The PwC report reveals a dual crisis within the industry: unprecedented disruption and a lack of financial value creation. Between 2015 and 2024, the sector experienced a negative average economic spread of approximately 2% annually, failing to generate sustainable financial returns. At the same time, insurers face mounting pressures from:
- Rapid technological change
- Evolving customer expectations
- Growing protection gaps
- Workforce and talent shortages
- Market consolidation
- Outdated infrastructure and cultural inertia
Despite these obstacles, customers still rely on insurers for dependable protection. Balancing this expectation with the urgent need for transformation is the industry’s greatest challenge yet.
Survey Insights: Bold Goals, But Execution Lags
PwC’s market-backed survey—featuring 19 top insurers, brokers, and intermediaries across the EMEA region—uncovers a stark reality: while all respondents are pursuing business model transformation, many are uncertain they can deliver.
Key enablers cited by industry leaders include:
- Resourcing and talent (84%)
- Effective governance (84%)
- Change culture and execution discipline (68%)
- Technology enablement (53%)
- Strategic clarity and bold goals (53%)
- Leadership commitment (47%)
Yet, one in three CTOs expressed doubts about meeting transformation goals within their timelines and budgets—a red flag for stakeholders counting on timely innovation.
What’s Holding Insurers Back?
The report outlines several deeply rooted barriers to change:
- Customer engagement gaps: Most insurers still operate on transactional models, missing opportunities for continuous, personalized interactions
- Retreat from risk: Climate change has made some insurers wary of offering coverage in critical areas like property insurance, widening the coverage gap
- Tech debt: Aging IT infrastructure hampers innovation, even as digital tools offer efficiency and better user experiences
- Workforce limitations: The industry struggles to attract top talent amid competition from more agile sectors
- Strategic fragmentation: Many companies lack a cohesive transformation strategy, relying on scattered initiatives instead of systemic reform
The Road Ahead: Agility, Innovation, and Resilience
PwC’s co-authors, Kai Müller and Phillip Arendt, argue that the next three to five years are critical. The firms that successfully align near-term operational improvements with long-term strategic goals will be those that lead the industry into a more resilient future.
Insurers must take bold steps to:
- Rebuild customer trust with personalized, digital-first experiences
- Close protection gaps by expanding risk appetite in underserved areas
- Modernize tech stacks while safeguarding operational reliability
- Attract and upskill talent to drive innovation
- Commit to enterprise-wide transformation, not just incremental fixes
Download the Full Report
“Accelerating Insurance Transformation” is essential reading for anyone invested in the future of the insurance industry. It offers a sobering yet actionable roadmap for navigating the challenges ahead.