8 September 2025 – For the first time in its 14-year history, PwC’s Insurance Banana Skins 2025 survey, published biennially by PwC and the Centre for the Study of Financial Innovation, reveals that technology-related risks dominate the top three concerns facing the global insurance industry.
The survey was launched by PwC today at the annual Reinsurance Rendez-Vous de Septembre in Monte Carlo. Based on insights from hundreds of insurance professionals worldwide, including in the Cayman Islands, it highlights the extent to which technology-related risks have become embedded, with cyber-crime, artificial intelligence (AI), and technological change identified as the most urgent threats over the next two to three years.
Cyber-crime retains its position as the number one risk for the third consecutive edition, and its severity score reached an all-time high, driven by the increasing frequency and sophistication of attacks, the proliferation of ransomware-as-a-service, and amplified anxiety towards the disruptive potential of generative AI in the wrong hands.
The misuse or poor governance of AI has surged in prominence, becoming the fastest-rising risk in the survey. Industry concerns centre on the potential for AI-driven fraud, as well as the risk of regulatory breaches due to inadequate internal controls. While AI clearly presents transformative opportunities for the insurance industry, the report warns that failing to harness its potential could itself become a critical risk.
The third-ranked risk—failing to keep pace with technological change—reflects long-standing challenges around legacy IT systems and the cost of modernisation. Companies know they are losing money through inefficiencies but are hesitating to commit to updates that may soon be outdated. Because of this, some in the industry see this ‘banana skin’ as less of a risk to the industry, and more one for individual firms – moving forward in this space is a competitive differentiator, at the expense of those slow to adapt.
Ric Agrella, Partner, PwC Cayman Islands, said:
"The 2025 edition of PwC’s Insurance Banana Skins reveals a decisive shift in industry priorities, with technology-related risks now making up the top three on the list of concerns for the global insurance sector. Regardless of maturity or market strength, insurers worldwide are increasingly exposed to the disruptive forces of technological change. With cyber-crime remaining the top risk, and misuse of AI and failure to modernize effectively, closely following as top of mind for insurance executives, it further emphasizes the need for agility and investment in transformation necessary to stay competitive, achieve desired outcomes and as importantly, a peace of mind. It is evident that sustained success in this evolving landscape demands strategic responsiveness to geopolitical and digital developments, and a relentless drive to stay ahead in a rapidly transforming industry."
Economic and Regulatory Pressures Intensify
This year’s survey shows a sharp rise in concern over macroeconomic risks, now perceived as the most severe in a decade. Lingering inflation, uncertain interest rate trajectories, and geopolitical instability are creating a challenging environment for insurers, undermining strategic planning and growth.
Survey respondents drilled down further to a possible root of the risk – the affordability of insurance. The reputational threat to insurers, and the threat to the industry’s ability to pool risk effectively, when poor macroeconomic conditions put pressure on affordability of products, raised concerns for survey respondents.
Regulatory risk also features prominently, with industry professionals voicing frustration over the misalignment between regulatory priorities and the fast-evolving risk landscape. The most pressing concern is that regulators are not keeping pace with emerging threats—particularly those driven by technological change. Additionally, questions around the relevance and implementation quality of existing rules persist, with calls for more agile, forward-looking governance that supports innovation while safeguarding market integrity.
Evelyn Urban, Director, PwC Cayman Islands, said:
"As companies continue to navigate the technological risks while trying to remain profitable and competitive, they also face economic and regulatory risks that rank close behind on their list of concerns. Facing inflationary pressures, uncertainty in interest rates and geopolitical instability puts undue pressure on re/insurers as they develop and price their products in a challenging global environment. Additionally, as they try to keep pace and respond to the economic pressures, they are also bound by regulatory compliance requirements and, as in prior years, remain concerned with the misalignment between regulatory developments and evolving risks. Prudent regulation, robust oversight and policyholder protection are key, but a relevant, risk-based and forward-looking approach is needed to allow insurers to foster innovation, efficiency and agility in their business.”
Keyur Patel, Author of Insurance Banana Skins 2025, said:
“The environment in which the industry operates is changing faster than ever, and insurers will need to challenge some fundamental assumptions – related, for example, to their vulnerability to cyber-attacks, the immediacy of climate risks, and what the future of insurance looks like in a world increasingly defined by AI. How do insurers stay relevant to customers? Are existing business models fit for purpose? The tone of the responses we received suggest that when risks are known, the industry is often well prepared – but the looming unknows could ultimately define its future.”
-Ends-
Notes to Editors:
The survey was conducted from June-August 2025 and is based on 698 responses from 42 territories.
In the questionnaire, respondents were asked to describe, in their own words, their main concerns about the insurance sector over the next 2-3 years. They were then asked to score a list of 23 potential “Banana Skins” or risks from 1 (least severe) to 5 (most severe).
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