Kathmandu. Artificial intelligence (AI) is constantly transforming insurance operations. Insurance companies have allocated 3% to 8% of their IT budgets in 2025 to technology development. However, only less than 5 per cent have published measurable financial impact reports.
Swiss Rico’s latest Sigma report expects early adoption of efficiency and underwriting improvements, rather than labor elimination. “One of the key challenges will be pricing risks without prior assessment of the situation,” the report said.
The global insurance industry is entering a new phase shaped by high inflation, industrial policy, demographic changes and rapid advances in AI, according to the Swiss Re Institute. “However, the sector remains profitable, with expected stable premium growth until 2027,” Swiss Riley said.
In its latest Sigma report, Swiss Relay said that “reindustrialization and government spending are boosting demand for engineering, property and liability insurance.” However, supply chain changes are creating more concentrated and correlated risks. ’
The report noted that government intervention has tripled since 2012 and industrial policies are also pushing up long-term inflation and bond yields. “This is impacting the investment strategies of insurance companies,” the report said.
Swiss Riley said the aging population was changing its safety requirements. “Demand is shifting from traditional family protection to retirement income, long-term cover and health insurance,” Swiss Relay said, adding that it is changing the wealth liability management needs of insurers and increasing the importance of long-term solvency planning. ’
Despite macroeconomic uncertainties, Swiss Relay said the global insurance industry is well-capitalized, with solvency ratios above 200 per cent with strong liquidity buffers. ’
