The aim of insurance is to take on and protect against economic risks. Additionally, the insurance industry provides investments in financial markets, contributing to economic growth and development. The insurance sector is very conservative, and changes occur more slowly. However, with digitalization, the insurance sector is changing faster than ever before. Insurance is becoming much more than just compensating for damages; insurers are becoming advisors on how to mitigate, prevent, and manage risks. In modern business, especially in the insurance industry, there is a clear need for rapid adaptation in all aspects of operations, including the area of digitalization or digital transformation. The insurance industry, which has traditionally focused on classical approaches, is now facing revolutionary changes through the introduction of new technologies such as artificial intelligence, data analysis, the Internet of Things, and blockchain technology. These changes are radically reshaping processes within the insurance industry. The topic of this thesis is both current and challenging, as it shows how insurance companies in Croatia are dealing with these challenges. Digitalization and digital transformation are essential for increasing efficiency and competitiveness in business and improving customer interaction.