Three quarters (74%) of leading UK and international insurance firms surveyed by Byline Research said that the need to deal in paper is still as important as it was 10 years ago.
The research will provide ammunition for critics of the industry who claim it is lagging behind banking on adopting the latest technologies.
Customer distrust about doing business online was the main reason cited by insurers for the industry's snails-pace move to e-business.
"For the majority of customers paper will remain king," said Mark Lewis, European vice-president for the document management company ActionPoint, which commissioned the research.
The complex nature of many insurance policies has also meant that insurers have tended to stick with paper forms when doing business, Lewis added.
"Insurance companies have spent a lot of money on forms to make them more usable," he said.
The need to capture data from documents and integrate with back-office systems were cited as the key technical challenges to doing business online.
The survey also painted a bleak picture for the future of digital signatures. Only one in five insurers expected to use digital signatures routinely within the next two years and more than a quarter said that they would never use them.