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Bain flags structural challenges for global insurers after 2025 gains
Bain says profitability was driven by rate increases and a benign catastrophe year, but calls out rising affordability pressures and a nearly 50% drop in hiring since 2022.
Global insurers posted strong 2025 results marked by improved profitability and premium growth, but Bain & Company warns that the momentum is largely cyclical rather than a sign of durable long-term health, according to Insurance Journal. In Bain’s view, insurers should focus on lowering the cost of risk through loss prevention, expanding access to advice and coverage, improving productivity with AI, and using capital more efficiently. Bain also tied recent profits to rate increases and a benign year for catastrophe losses, arguing that those drivers may not persist. Bain identified three major challenges for the industry, including affordability and availability difficulties, investment returns tied to AI, and fragmenting value chains. The report notes that property and casualty coverage has become less affordable in some regions and that customer loyalty is weakening. The research also points to operational and workforce signals, saying switching providers in U.S. home and auto insurance has increased in recent years and that hiring has fallen by nearly 50% since 2022. Bain added that the profit pool is increasingly concentrating around technology service providers for core systems, AI, and data, which it expects to outgrow the insurance industry as AI augments and in some cases replaces labor and traditional IT assets.