Exactly, victims of the solar system. As insects they should be more adaptive, get a bonus to compatibility, far higher birth rate, bonus to manufacturing and fleet production perhaps (hive mind coordinates efforts of the workforce more efficiently), they could be stronger and pose a real threat without having to rely on science, I think they should really be about swarming to kill their opponents.
Having played a lot to master of orion 2, I can't prevent me from making the parallel with the Klackon race, they are insects too. And I remember them being really strong in the early stage of the game, thanks to a bonus to food (here it is birth/death rates that look the closest to me) and industrial productions (manufacturing and fleet production) even if they were unable to get as much techs as the other races, so they could get huge low tech fleets faster than others an be a real threat. The game being different I don't say it is the solution, but it may be a clue to solve this situation.
The balance is tricky here, if they were too strong in the early game, being able to directly attack opponents in this game they would simply destroy everyone, which is not better than having them feel a litlle useless right now.