Insurers may cover only 25% to 33% of disaster damages by 2030

Insurers also expect to gain up to 15% revenue rise from AI and tech boost.

In about five years, only 25% to 33% of natural disaster damages and less than half of mortality risks may be covered by insurance, Bain & Company revealed.

Bain’s global insurance head, Sean O’Neill, noted that despite strong balance sheets, insurers face profitability pressures in multiple lines of business. 

The “Bridging the Protection Gap: Affordability, Access, and Risk Prevention” report further revealed that cyber risks are another growing challenge, with global ransomware damages projected to exceed $250 billion within six years. 

Bain’s research suggests that individual insurers alone cannot address this risk and calls for expanded public-private partnerships and additional capacity from reinsurers and alternative capital providers.

Despite these challenges, Bain sees opportunities in technology. 

AI and unstructured data are reshaping the industry, with insurers expected to gain a 10% to 15% revenue increase, up to 30% savings in operating expenses, and a 30% to 50% reduction in property and casualty leakage.