Life and retirement insurers seek resilient, AI-ready operations as compliance, service stability and modernization needs grow, ISG Provider Lens^® report says

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.

"Europe’s life and retirement insurers are looking for sourcing models that can withstand scrutiny and still evolve," said Ashish Jhajharia, lead author of the report. "Providers that combine domain depth, auditable operations and practical transformation roadmaps are better aligned with how buyers are making decisions."

The report also explores other trends affecting Europe’s life and retirement insurance market, including the growing importance of data readiness and the need for experienced, domain-certified delivery teams.

For more insights into the insurance-related challenges faced by enterprises in Europe, plus ISG’s advice for overcoming them, see the ISG Provider Lens Focal Points briefing here.

The report for Europe evaluates the capabilities of 23 providers across one quadrant: Life and Retirement (L&R) BPO.

It names Accenture, Cognizant, Genpact, HCLTech, TCS and WNS, part of Capgemini, as Leaders in the quadrant.

In addition, NTT DATA and Sutherland are named as Rising Stars — companies with a "promising portfolio" and "high future potential" by ISG’s definition — in the quadrant.

In the area of customer experience, Sutherland is named the global ISG CX Star Performer for 2026 among European life and retirement insurance providers. Sutherland earned the highest customer satisfaction scores in ISG's Voice of the Customer survey, part of the ISG Star of Excellence™ program, the premier quality recognition for the technology and business services industry.

The 2026 ISG Provider Lens Insurance Services — Life and Retirement (L&R) BPO report for Europe is available to subscribers or for one-time purchase on this webpage.

About ISG

ISG (Nasdaq: III) is a global AI-centered technology research and advisory firm. A trusted partner to more than 900 clients, including 75 of the world’s top 100 enterprises, ISG is a long-time leader in technology and business services that is now at the forefront of leveraging AI to help organizations achieve operational excellence and faster growth. The firm, founded in 2006, is known for its proprietary market data and research, in-depth knowledge and governance of provider ecosystems, and the expertise of its 1,500 professionals worldwide working together to help clients maximize the value of their technology investments.

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Press Contacts:

Laura Hupprich, ISG

+1 203-517-3132

laura.hupprich@isg-one.com

Philipp Jaensch, ISG

+49 151 730 365 76

philipp.jaensch@isg-one.com