2026 looks set to bring continued waves of change in the nature of risk, in the requirements of insureds, and in the state of technology – change that will manifest in an increasingly unpredictable geopolitical and macroeconomic climate. For insurers, this will mean more debate and activity around how to accommodate rising operating costs, how to respond to evolving needs of insureds, and how accelerating use of modern technology, especially AI, will reshape the industry.

The new year looks like it will be a continuation towards a softer market, with insurers seeking to improve understanding of risk, optimise how they match risk to rate, and control operating costs and indemnity. Pricing risk more accurately whilst at the same time managing down indemnity is a fundamental requirement of profitability in a soft market. This could see some fundamental changes in the way insurers look to more seamlessly link pricing and underwriting functions.

The role of new technologies in helping insurers adapt and exploit change is well established. Resistance to solutions like cloud has mostly dissipated, and insurers are seeing technology and data as enablers as they look to transform their operations. Furthermore, insurers have over the last 12-18 months been evaluating the potential use cases for generative AI. In that time, we have seen a strengthening of conviction that not only will GenAI play a significant role in the years ahead, but it could potentially transform the very fabric of certain functions in the years to come. Whilst there has been limited value delivered at an enterprise level by AI initiatives during 2025, insurers have been experimenting and learning, and we expect to see this continue in 2026.

Meanwhile, extreme weather events have hit people, businesses and countries with ever more destructive force. For example, the recent hurricane that struck Jamaica caused losses equivalent to a third of the country’s GDP. The industry knows its responsibility in this regard, and the experiences of 2025 must mean a greater focus on innovations like parametric insurance, more granular natural catastrophe modelling, and advances around proactive, preventative actions. Further, we see tremendous societal benefit from insurers being more open to sharing data around natural catastrophes and the coverage gap so that we can better work together to develop solutions to combat these threats.

Finally, we anticipate increased intensity for the recruitment and retention of talent in the industry. With new challenges and new technologies, comes an increasing need to reevaluate the roles that are required to address these new challenges, and the skills required to deliver optimal outcomes. We expect to see a real focus on data scientists, as well as experienced underwriters and claims professionals, but also a focus on newer roles and skills around transformation, AI, experiential design and digital engagement. Some of these newer roles and skillsets will be in high demand and short supply in the near future, and this will drive a real battle for talent across the industry. The insurance ecosystem has to be focused on attracting this talent, upskilling its existing talent pool, and retaining some of the incredible professionals that do so much to deliver on the promise of insurance.

Ultimately, this focus on talent might be decisive for insurers in the years ahead; advances in technology can be transformative, but only if shaped and deployed by the right people with the right skills and experiences, and within organisations designed for flexibility and innovation in the face of ongoing change.

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