Life and retirement insurers seek resilient, AI-ready operations as compliance, service stability and modernization needs grow, ISG Provider Lens® report says
LONDON, June 30, 2026–(BUSINESS WIRE)–European life and retirement insurers are reshaping business process outsourcing (BPO) relationships to strengthen resilience, compliance and AI-ready modernization as regulatory scrutiny and legacy complexity increase, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a global AI-centered technology research and advisory firm.
The 2026 ISG Provider Lens® Insurance Services — Life and Retirement (L&R) BPO report for Europe finds that life and retirement insurers are reassessing sourcing strategies as they contend with stricter regulatory oversight, demographic changes and fragmented legacy policy platforms. Many carriers operate across multiple jurisdictions, making governance, data localization and multilingual servicing central to how outsourcing models are structured and evaluated.
“European insurers are no longer treating BPO primarily as a cost play,” said Thorsten Stuewe, director, EMEA Insurance, at ISG. “They need partners that can provide operational continuity, regulatory confidence and gradual modernization without adding new risk.”
Compliance readiness has become a prerequisite for provider selection in the region’s insurance industry. Enterprises are looking for BPO models that embed controls, audit trails and supervisory reporting into day-to-day operations rather than adding governance after the fact. Buyers also expect providers to have experience with Europe’s General Data Protection Regulation, the Digital Operational Resilience Act, Solvency II regulations and country-specific pension rules.
Insurers in Europe increasingly seek modernization that does not destabilize core operations. Many still depend on legacy policy administration platforms tailored to local products and regulations, which limits their use of straight-through processing and slows product launches. Rather than pursuing large-scale replacements, buyers favor phased approaches that combine process redesign, targeted automation and digital augmentation of existing systems.
Service stability is becoming as important to the industry as commercial efficiency. European insurers still value cost competitiveness but now evaluate it alongside predictable service levels, exception management and consistent turnaround times for policy servicing and claims. Multilingual support and the ability to absorb regulatory or volume shocks without affecting service are increasingly important in provider evaluations, ISG says.
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