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The global insurance sector is enjoying a period of growth. According to industry analysis, total premiums rose 8.6% in 2024 to €7.0 trillion—the most rapid annual rate since before the global financial crisis—driven by gains across life, non-life and health lines. Reinsurers also posted strong results. One study showed that combined ratios reported by a subset of industry players fell to 86.8%, their most profitable level in a decade. Meanwhile, average return on equity reached 17%, comfortably above the cost of capital.
Beneath these headline figures, deeper structural challenges persist. Systemic shocks have repeatedly tested the global risk chain. The pandemic exposed fragilities in health and liability systems. Monetary tightening reshaped solvency models and capital allocation. And the escalating frequency of climate-linked catastrophes, from Canadian wildfires to Brazilian floods, have highlighted the limitations of traditional risk models.
The industry has long acknowledged the need to address the global protection gap, estimated at US$1.83 trillion. But it must also come to terms with a new set of gaps: in resilience, talent and funding. These are not peripheral concerns. They go to the heart of the industry’s capacity to serve its customers. Over the next decade, as exposures become more complex, interconnected and volatile, the boundaries of insurability and the industry’s risk–reward trade-offs are being redrawn. And this means the role of reinsurers, who act as capital shock absorbers and stabilisers, is assuming greater prominence.
This changing landscape demands a twin response. First, it means investing more in the industry’s core disciplines—risk selection, pricing and capital management—which are more essential than ever. That’s especially true for reinsurers, given the role they play in the system. Most firms are rightly focused on strengthening their underwriting discipline and their core franchises across property and casualty, life and health.
Second, in a world reshaped by climate change, technology and other megatrends, a growing number of insurers—including reinsurance firms—are beginning to redefine their role. Instead of just responding to losses, they are emerging as enablers of growth, transition and resilience. They are shifting their focus upstream, towards prediction and prevention to help mitigate risks before they materialise. Beyond traditional underwriting, firms are investing in data infrastructure, advanced analytics and integrated services. Insurance is being embedded into wider ecosystems—including mobility, energy and healthcare—supporting capital flow and operational continuity.
This change represents not only a shift in distribution. It is a rethinking of the risk business itself: a transition from selling point-in-time to enabling resilience and stability. Below, we explore how reinsurers can understand the new world of interconnected domains; address critical gaps in protection, resilience, talent and funding; and embrace the strategic actions needed to stay relevant and drive the industry forward.
From sectors to systems
Broadly speaking, the insurance industry needs to change how they think about the markets they serve. Traditional sector boundaries are breaking down. Climate transition, generative AI and shifts in capital flows are pushing firms to operate across ecosystems. PwC’s Value in motion framework captures this shift through the lens of economic domains—dynamic, interconnected ecosystems defined by broad human needs rather than sectoral silos. Climate change, a system-wide disruptor, requires a global rise in annual low-carbon investment to roughly $5 trillion by 2030 to stay on track for net-zero emissions by 2050, according to the IMF. AI adoption could add up to 15% to global GDP over the next decade, if deployed responsibly and with public trust. Together, these forces are redefining the conditions for growth, resilience and risk.
By 2035, the Move domain, which encompasses transport, infrastructure, energy systems and mobility platforms, is projected to contribute $5.86 trillion in gross value added (GVA). GVA is the total value of goods and services produced by a sector of the economy, and it provides insights into that sector’s contribution to overall economic output. The Care domain, integrating life sciences, health technology, insurers and care delivery, is forecast to exceed $9.31 trillion GVA by 2035. The Fuel and Power domain, encompassing energy generation, distribution and storage, is expected to reach $6.19 trillion GVA in that timeframe, reflecting the scale of investment required to support global electrification and transition efforts.
Fund and Insure: From backstop to backbone
The Fund and Insure domain lies at the heart of these transformations. As the financial backbone for allocating capital, managing risk and supporting transactions across the economy—including insuring the large amounts of low-carbon investments required—it is expected to generate $17.04 trillion GVA by 2035. As a critical enabler of other domains, Fund and Insure is fertile ground for cross-sector collaboration among traditional and non-traditional partners, providing them with new, more efficient models for capital allocation and financial services.
Consider, for example, the $115 billion in alternative capital—nearly a fifth of global reinsurance capacity—now flowing through vehicles such as insurance-linked securities, catastrophe bonds and sidecars. Behind this surge is a more diverse and international investor base, including pension funds, sovereign wealth funds and asset managers. At the same time, digital platforms, smarter risk models and clearer regulations are opening up access to reinsurance markets.
The flurry of reconfiguration is providing new opportunities and presenting challenges. PwC’s BMR Pressure Index, which tracks early signs of stress on business models, shows the shift is already playing out in market behaviour. In 2025, we estimate that $604 billion in enterprise value could change hands in the financial-services sector alone, as companies move to reinvent themselves. Seventeen of 22 global sectors are experiencing the highest levels of transformation pressure seen in 25 years. For insurance, that pressure is now at its second-highest point on record.
Four gaps shaping the future of risk
The protection gap—the difference between total economic value at risk and the share of that value insured—has been a dominant theme for several years. Now, the industry needs to consider a broader set of structural gaps that are becoming just as urgent. To remain relevant, insurers and reinsurers must address not only who they protect, but how they build resilience, deploy capital and build expertise.
Drawing from our client work across multiple sectors, we’ve identified four pressing gaps.
1. Protection gap
The persistent shortfall between insurable risks and actual coverage remains acute—especially among underserved populations, small and medium-sized enterprises, and emerging markets. According to one study, just 40% of global economic losses were insured in 2023, leaving an estimated $1.83 trillion unprotected. A growing pension gap adds further strain, leaving millions without adequate financial security in retirement.
As exposures rise, the cost of inaction grows. Yet, in many instances, the risk–return profile remains unattractive to private capital. Reinsurers are now exploring alternative models that aim to make coverage both scalable and investable, such as blended finance, public–private structures and sustainability-linked risk pools.
How the industry is responding:
- In agriculture, firms are embedding parametric insurance—insurance that pays out based on an event rather than damages—directly into agri-tech platforms. Triggered by satellite data and tailored to localised climate exposure, these solutions provide farmers with faster, more targeted protection.
- In mobility, insurers are bundling protection products, including GAP coverage and residual value guarantees into EV-leasing structures, as OEMs target expansion and new geographies.
2. Resilience gap
There is a widening mismatch between rapidly evolving risks around climate, cyber and supply chain shocks and the capacity of infrastructure, regulation and business systems to keep up. Reinsurers increasingly see their role not just as underwriters of last resort, but as enablers of economic and environmental transition. The task is to derisk long-term capital and offer confidence to investors, ultimately accelerating progress towards net zero and beyond, from utility-scale renewables to climate-resilient urban design.
How the industry is responding:
- In property, firms are seeking to strengthen resilience to extreme weather by supporting ‘build back better’ initiatives and incentivising climate-resistant construction standards.
- In connected mobility, firms are enabling real-time underwriting through telemetry and behavioural analytics, pricing risk dynamically across evolving ecosystems, including in semi-autonomous fleets.
- In healthcare, players are expanding into preventative wellness ecosystems, integrating private health coverage with digital monitoring and lifestyle incentives.
3. Talent gap
As the industry adapts to more interconnected, fast-moving ecosystems, the talent profile it needs is changing. Traditional product and technical expertise is still relevant, but future-fit firms also require capabilities in AI, data science and cyber risk as well as industry-specific knowledge. Just as crucial are professionals who can navigate complex stakeholder environments and collaborate across sectors. Increasingly, firms are looking for people who understand how different industries operate and can translate that insight into practical, customer-focused solutions.
How the industry is responding:
- In mobility, a global reinsurer partnered with a major automotive manufacturer to develop digital insurance products embedded within vehicle and transport services. The collaboration required talent with expertise across insurance, automotive and digital platforms, reflecting the shift towards cross-sector, client-centric capabilities.
- One leading broker reconfigured their go-to-market strategy in pursuit of greater expertise, moving beyond traditional product-based structures and giving equal weight to industry, geography, and product to better serve clients across specific regions and sectors.
- In technology, reinsurers are upskilling internal talent through AI academies while also acquiring or partnering with niche AI firms to accelerate capability-building. These strategies reduce reliance on scarce external hires, secure high-performing teams and help embed AI literacy across the organisation.
4. Funding gap
The scale of future risk, especially risks linked to climate adaptation, energy transition and infrastructure resilience, will likely outstrip what traditional balance sheet models can support. The challenge is not about capital supply, but aligning it with evolving risks. New financing vehicles are needed to mobilise and channel investment where it can have the greatest impact.
How the industry is responding:
- Reinsurers continue to develop the use of sidecars and insurance-linked securities to tap third-party capital and support large-scale climate projects. Insurers are also forming direct capital partnerships to fund transition-linked investments.
- Sovereign risk pools and co-insurance schemes are blending private capacity with public backing. In Bermuda, a public–private mandate is positioning the longstanding insurance centre as a climate finance hub.
- Specialised agencies are piloting non-indemnity climate solutions with support from governments and multilateral institutions.
Taking strategic action
As value shifts across domains and industries reconfigure around new technologies, capital flows, and customer expectations, insurance leaders face increasingly complex choices. Determining when to act, where to step in and how to help shape the next wave of risk transfer are strategic imperatives.
Here are three bold moves insurers and reinsurers should consider.
Act now to develop domains. Innovation in AI, mobility, energy and agriculture are already reshaping how risk is structured and priced. Reinsurers should rethink how they allocate capital, not only underwriting specific firms, but supporting (and being a member of) entire domain ecosystems. These are fertile grounds for business model reinvention. That might mean co-investing in platform players, or reconfiguring portfolios around shared exposure pathways.
Target the next wave of innovation. The challenge for all insurers is to be both more agile and more precise. Co-develop core technology capabilities with leading hyperscalers and insurtechs. Build bespoke AI tools for supply chain analytics, portfolio optimisation or loss prediction. These collaborations can yield tangible competitive advantage while contributing to internal underwriting and capital allocation models.
Develop your workforce for structural change. As sector boundaries blur, traditional organisational charts may no longer suffice. Recruiting senior operators from client sectors—mobility, infrastructure, digital health—into internal innovation, product or risk teams will sharpen insight and accelerate execution. Talent strategy and workforce transformation should always be considered together with AI.
Contributors to this article include PwC Bermuda Partner Matthew Britten, PwC US Partner Richard de Haan, PwC US Principal Keith Palmer, PwC Germany Partner Heiko Rohrig, PwC Switzerland Partner Jörg Thews, PwC Bermuda Territory Leader Arthur Wightman, and PwC Switzerland Director Alexander Viergutz.
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