A historical and technological overview of the insurance industry’s evolution into the digital era

The insurance industry plays a crucial role in the global financial system by acting as a buffer against risk and loss. By pooling the risk of a large number of individuals, insurance companies allow people to amortize the financial consequences of not only catastrophic events, such as firefighting insurance for households, but also daily, mundane events, such as borrowing funds to buy homes or starting businesses. For most individuals, their biggest expenses throughout their lives will be associated with buying health-insurance limits, child-rearing, and, after retirement, pensions, to which insurance companies add value by managing financial savings (Chen et al., 2023; Grant et al., 2024; Nguyen et al., 2024).

Insurance companies offer various financial products, from property and casualty insurance to life insurance and pensions. However, the overall financial value that the insurance sector adds to the economy is small – commercial banks account for a large portion of financial assets, controlling more than 18 percent of the financial market, while insurance companies manage only 6.5 percent. Despite the reduced relevance of the insurance sector, the challenges posed by volatile financial markets, global climate change, and demographic factors have led to growing partnerships between banks and insurance companies.

During the last several decades, the insurance sector has undergone important waves of radical innovation, beginning with the widespread diffusion of information and communications technology in the 1990s. Although the newly adopted technologies have improved the performance of insurance companies, enabling them to reduce their operating costs, change the model and price of the service offered to clients, the overall development of the insurance sector has been slow and punctuated by periods of stagnation (Rodriguez et al., 2023; Sharma et al., 2025).