European insurers—including major players operating in Italy—are banking on artificial intelligence to unlock 37.3 billion euros in additional revenue by 2028, according to a Bloomberg Intelligence analysis tracking the continent's largest insurance groups. The forecast signals a strategic pivot: AI is no longer a cost-cutting experiment but a revenue engine that could reshape the sector's profitability and workforce over the next three years.
Why This Matters
• Revenue lift expected: European insurers project a 5.7% increase in revenue within 2–3 years and a 6.1% rise in pre-tax profits, driven by AI-powered underwriting, claims automation, and fraud detection.
• Initial cost spike: Operational expenses are forecast to jump 5.6% initially as firms reorganize processes and retrain staff, before efficiency gains materialize.
• Profit boost: The anticipated €10.7 billion increase in pre-tax profit across major European insurance groups underscores the sector's confidence in AI's revenue potential.
The analysis underscores a paradox: despite automation, headcounts are expected to grow, not shrink, as insurers expand into new service lines and digital channels. For policyholders and employees in Italy, this transition will reshape everything from how claims are processed to the skills demanded in the job market.
Revenue Growth Takes Center Stage
The European insurance sector is shifting its AI narrative from operational savings to top-line expansion. According to Bloomberg Intelligence, the 37.3 billion euro revenue increase anticipated by 2028 will be accompanied by a 10.7 billion euro boost in pre-tax profit across major groups. These figures assume successful deployment of machine learning in pricing, customer engagement, and risk modeling—areas where AI's impact is already measurable.
The 90% of insurance managers planning to increase AI spending this year prioritize revenue generation over cost control, reflecting a sector-wide commitment to leveraging technology for growth rather than efficiency alone.
What This Means for Policyholders and Workers
For consumers in Italy, AI adoption in the insurance sector is expected to improve service delivery, more personalized offerings based on data integration, and enhanced fraud detection that could help stabilize costs over time.
For employees, the picture is more nuanced. Contrary to widespread fears of mass layoffs, the Bloomberg analysis suggests headcounts will rise even as productivity per worker increases. The Italian insurance sector's collective bargaining agreement, renewed in May 2026, emphasizes that AI must support and complement the work of employees, with joint oversight mechanisms to ensure fair implementation.
Job remodeling is inevitable. Roles are expected to evolve, with employees potentially redeployed into functions that emphasize judgment, client relationship management, and oversight of automated systems. The workforce will continue to grow alongside AI deployment, driven by new business lines and the need for hybrid human-AI workflows.
Implementation Costs and Efficiency Timelines
The initial investment phase comes with financial friction. Insurers anticipate a 5.6% average increase in their cost base during the first wave of AI adoption, driven by system integration, data infrastructure upgrades, and workforce retraining. Legacy IT systems—often decades old—pose a significant obstacle for many firms.
The payoff, however, is expected within a three-year horizon. As AI tools mature and staff become proficient, operational costs should decline below pre-implementation baselines, delivering the efficiency gains that justify the upfront spending. According to Bloomberg Intelligence analysts, execution will be the key test over the next two to three years, especially given that technology budgets remain modest in real terms.
Regulatory and Ethical Framework
The European Union's AI Act, which took effect in 2024, classifies insurance underwriting and pricing systems—especially in life and health insurance—as high-risk, imposing strict transparency, data governance, and accountability requirements. Insurers must comply with these standards by August 2026. The European Insurance and Occupational Pensions Authority (EIOPA) issued guidance in 2025 on integrating AI governance with existing frameworks like Solvency II, GDPR, and the Insurance Distribution Directive.
In Italy, regulatory alignment ensures that AI adoption proceeds within a framework designed to protect consumers and workers while enabling innovation.
The Road Ahead
The next two to three years will determine whether European insurers can deliver on their AI revenue projections. Success hinges on execution discipline: integrating AI tools with legacy systems, retraining workforces, and navigating regulatory scrutiny without stalling innovation. For Italy's insurance sector, domestic firms are competing to modernize infrastructure while honoring commitments to employees and regulatory compliance.
For policyholders, the promise is improved service and better-tailored products. For workers, it's a commitment to augmentation over automation—a future where AI amplifies human capability rather than replacing it. Whether that scenario materializes will depend on how seriously insurers implement the principles embedded in collective bargaining agreements and regulatory mandates.
