Yes, they were nerfed to compensate for better AI. You can change it back in data/english/CoreDifficultyLevels.xml

Insane's HP changes actually make the game harder than it used to be... but there's other changes that have reduced the overall difficulty.

Monsters always had double hps, it's AI unts that had tripple hit points.  Nowadays, monsters have double hps, and AI units get extra traits. For example, all AI heroes will get a trait that gives them 3 hit points per level, so that they will get   ( 2 (standard) + 3 (trait)) x 2 (insane)  for a total of ten hit points per level, which is actually 5 times the normal amount.

But it is true that it's easier to play on Insane than it used to be before release.  In 1.02 AIs seem to be a lot less successful at expanding.  This is due to the lower cash bonus they now get and to the elimination of a few bugs that used to allow the AI to build very quickly.

Before release, the AI was wimpy in the beginning, but grew much quicker than the player.  Nowadays, early AI units and sovereigns are much more dangerous, but the AI is easily overtaken around turn 60-80.

Ah. So it was intended after all. Must've missed that in the patch notes. Thanks.

Personally I play on Sentinemodo difficulty level, that is:

I am sorry don't see where I make my own thread. Can someone offer me advice? I love the game it's endlessly fascinating! Just wondering, I have a game on a huge map - 9 v 9 players on 2 teams. All was well until war was declared on me and I am outclassed. I have been offered tribute by allies and enemies until now. I noticed that, even though I have been trading research via treaties, etc. that I have now 156 research in civilization whereas one of my allies has 95,000! What am I doing wrong?

Thanx!

And keep up the good work getting more amazing all time...

Yes, I was mistaken.  I just went to some of my old play-thoughts, and saw that ever since insane came around, monsters had triple hit points.  There was a time when x2 was the biggest bonus (May), and that's what I must have been remembering. As I was reading the play-thoughts, I noticed that at least some AI units had quintuple hit points, so in this respect, less has changed than I thought.

But my point remains - enemy AI heroes have actually become stronger, and so have units, with their additional traits.  Its the AI economy and infrastructure growth that have nose dived.

Here's a quote from my first play-through on insane (.915, June), when Frogboy thought the AIs were going down too easily for Insane. "Yithril & Magnar were definitely Insane, because they had the x5 hp and x4 population/research/production. [snip] As for the rest, with Resoln's capital at 509 population on turn ~50, I do not think they are at default either."

Nowadays, AI cities are capped by food much more easily - I think they lost some of the food bonuses. 

The neutral monsters have mostly lost hit points - for example the cave bears have gone from 111 to 80.  And Torax no longer has 960 hps.

They don't, the world difficulty only affects monsters. The AI difficulty determines the AI bonuses.

Yes, it has been nerfed. It is, however, very easy to mod back, as some people have pointed out.

Although to be completely honest, the HP bonus of mobs have never really impressed me. Usually, if you can fight something with twice its normal HP, you usually have a strategy in mind that would work just as well with 3x or 4x. I'd love it if mobs get extra traits (from a random selection) as bonuses. That way, you'd have a lot more potential for more interesting encounters. It'd make you check the stats of everything you fight.