Insurers have benefited from U.S. tax changes and generally favorable economic conditions during 2018 and should continue to do so in 2019, although economic slowdown could come as soon as 2020, according to a new report Friday from Deloitte Consulting LLP.

Meanwhile, technology and mergers and acquisitions will continue to help shape the industry going forward as insurers cope with changing data requirement and new accounting standards.

First-half property/casualty results were robust, according to Deloitte, with net premiums written up 12.7% on a year-over-year basis and net income more than doubling to $34 billion.

“Sustained economic growth, rising interest rates, and higher investment income are among the positive factors that appear to be bolstering insurer results in 2018, setting the stage for enhanced top- and bottom-line growth in the year ahead,” Deloitte said in its report.

This context, however, could become less favorable to insurers’ results, according to Deloitte.

"While 2018 and 2019 are shaping up to be banner years for insurers, some concerns are being raised about an economic slowdown, if not a full-fledged recession, as early as 2020,” the consultancy said in its report.

Technology will continue to be an important theme for insurers in 2019, Deloitte said.

Cloud computing has become increasingly core for the insurance industry, with seven in 10 insurers utilizing the cloud, according to Deloitte. “For many insurers, the cloud-computing debate is over,” it said.

The consultancy recommends insurers continue to adopt cloud services. “As insurers plan their IT investments, they should give cloud a higher priority when deploying new applications,” Deloitte said.

Mergers and acquisitions will also remain a force in shaping 2019 for insurers, even after deal sizes slumped somewhat in 2018 after two large acquisitions.

“Two massive acquisitions in 2018 seemed to set the stage for acceleration in large-deal M&A activity for the insurance industry, but stakeholders appear to have since pumped the brakes,” after American International Group Inc.’s purchases of Validus Holdings Ltd. for $5.5 billion and Axa’s mid-2018 purchase of XL Group for $15.3 billion, Deloitte said.

The consultancy was bullish for 2019 deals, however, despite the dropoff in 2018, although it warned on interest rates.

“Value-size deceleration notwithstanding, the confluence of unrelenting market pressure to achieve sustainable growth, a lingering abundance of capital and capacity, improving global economies, and an upturn in interest rates may indicate that insurers should be prepared for a potential uptick in M&A in 2019. Still, rising interest rates could be a double-edged sword, because it makes debt more expensive.”

One additional challenge for insurers in 2019 will be a higher bar for data stewardship under the European Union’s General Data Protection Regulation and the California Consumer Privacy Act of 2018 adopted in June, Deloitte said. “Consumer privacy is an emerging global issue for which insurers need to be prepared or risk suffering serious consequences,” Deloitte said.

Accounting rule changes will also help keep insurers busy in 2019, as they prepare for upcoming changes both in the U.S and internationally, the Deloitte report noted.

The International Financial Reporting Standards No. 17, Insurance Contracts, issued in 2017, will be effective in most countries on Jan. 1, 2021.

Meanwhile, U.S. Generally Accepted Accounting Principles is undergoing changes as the Financial Accounting Standards Board recently issued ASU 2018-12, effective for fiscal years beginning after Dec. 15, 2020, for public business entities, and for fiscal years beginning after Dec. 15, 2021, for all others.