The life & health re/insurance sector is experiencing a fundamental shift as claims costs begin to exceed premium growth across most markets, forcing carriers to reassess traditional business strategies.
According to SCOR, rising claims ratios driven by higher healthcare utilization, increased diagnosis rates, and shifting morbidity and mortality trends are challenging the sector's historic focus on new business development and underscoring the strategic value of claims management.
These cost pressures are becoming more acute. Global health insurance costs are projected to rise 10.3% in 2026, continuing a steep multi-year trend following 10% growth in 2025, with new medical technologies cited by 74% of insurers as the primary driver of claims inflation alongside declining public health systems and pharmaceutical advancements.
In response to these dynamics, carriers are restructuring their operations and capital strategies. Life insurers are increasingly turning to offshore reinsurance structures to manage the balance sheet impact of elevated claims.
For instance, CNO Financial reinsuring US$1.8 billion of supplemental health reserves while MetLife wrote US$$12 billion in pension risk transfer transactions in Q4 2025, demonstrates how carriers are using reinsurance to enhance capital efficiency amid claims pressures.
Digital infrastructure and advanced analytics are transforming claims from a routine administrative function into a value-generating operation that can strengthen customer relationships and operational performance.
Generative AI and automation technologies are shortening claim durations and reducing financial leakage by optimizing manual processes and improving decision-making speed.
Personalized digital interactions with claimants are increasing customer satisfaction metrics and improving retention rates across carrier portfolios. According to SCOR, carriers leveraging advanced claims capabilities are positioning themselves to capture market share from competitors that continue to emphasize new business development over claims excellence.
The reinsurance sector itself is undergoing parallel transformation, with private equity-backed reinsurers now accounting for 43.3% of aggregate reserve credits and modified coinsurance reserves, while Bermuda has attracted over US$50 billion in new capital into its life sector since 2016 as carriers seek partners capable of optimizing assets alongside managing biometric risks.
Claims data is strengthening carrier capabilities in underwriting and pricing accuracy while contributing to fraud detection and prevention initiatives. The expansion of claims capabilities extends beyond operational efficiency to support regulatory compliance and workforce retention.
According to SCOR, claims transformation initiatives are building brand trust by providing transparency during uncertain moments for policyholders.
The claims function has emerged as a lever for competitive differentiation in the life & health sector, and the question for carriers is no longer whether to invest in claims infrastructure but what competitive disadvantage will result from delaying such investment.
