Insurance trends 2026: From innovation to execution

In 2025, there was a strong conviction in the insurance industry around artificial intelligence, ecosystem driven growth, ESG integration and digital acceleration.

Although those themes were directionally right, the conversation, particularly in Europe, has shifted decisively. In 2026, the innovation narrative has been replaced by a narrative of discipline and execution.

1 AI: Moving from adoption to accountability

In 2025, early adoption of AI in underwriting as well as in claims was largely PoC (Proof of Concept) led. A plethora of startups coming up with a new AI driven approach was visible. In 2026, the next step is to have AI in production on a wider scale.

The use of AI itself is not expected to be a differentiator or an USP; governance, auditability and scale will be the drivers.

Especially in Europe, the compliance frameworks will demand audit trails, explainability, bias mitigation and accountability. Risk classification, conduct risks, claims outcomes and regulatory scrutiny will extend to all AI decisions. 

What changed: Governance of AI takes center stage after focusing on innovation in 2025.
What stayed the same: Speed and hyper personalisation continue as the primary priorities.
Investor signal: Governed AI bets are prioritised over PoCs and pilots.

2 Insurtech: From proliferation to consolidation

In 2025 with innovation in the driver’s seat, there was tremendous pressure finding investible opportunities, and identifying niche that could deliver tangible and garnering funding, be it internal in an enterprise or for startups.

2026 will see signs of consolidation. It is quite visible already that the bets are concentrated in the B2B space, embedded enablers and the tech infrastructure.

Insurtechs that focus on consumer journeys without demonstrable balance sheets, coupled with distribution partnerships, will certainly face headwinds.

Executive implication: ROI-driven partnerships need to take precedence over exploratory forays.
Investor signal: Front-end innovations simply are not enough. Demonstrable distribution proximity is a more realistic bet.

3 Legacy: Transformation to resilience

Already in 2025, legacy modernisation was a pragmatic way forward towards transformation. However, in 2026, we will see it move more towards an operation resilience issue than a transformation theme. Rapid advance in using modern AI powered tools has enabled several mitigation strategies. Compliance and supervisory interests are moving more towards 3rd party dependencies, recoverability reliance, and cloud domicile and concentration.

Board implication: Legacy is no longer a strategic need but an operational risk concern.

4 Talent: From hiring needs to productivity possibilities

Talent acquisition has been a long-standing challenge in insurance. Let’s admit that it is not perceived as the most wanted industry by young talent. In 2026, the focus will move away from volume to employee productivity.

Roles in underwriting, claims and services are getting redefined in terms of skill expectations and efficiency benchmarks with AI support or augmentation of systems.

What stayed the same: Upskilling is still essential
What changed: Headcount is no longer the right measure; output is.

5 Ecosystems: growth and accountability

In 2026, data ownership questions become critical to address conclusively. Liability and accountability take centre stage in ecosystem driven engagements. The ecosystem engagements in all lines of business continue to grow and expand and show how signs of slowing down.

Business continuity risks need to be addressed from financial, regulatory and reputational perspectives. Failures of any partners on the ecosystem need to have clear governance, risk mitigation routines and business continuity strategies in place. Furthermore, the EU compliance will ‘encourage’ a more open ecosystem driven approach.

Strategic implication: Ecosystem enablement needs to be looked at through a governance and business continuity lens.

6 Wealth Transfer: Demand vs margins balance

The great wealth transfer to millennials and Gen-Z will continue to influence life insurers’ strategies. Digital engagement, hyper personalisation, flexibility, ESG mapping, etc. continue as basic needs.

However, profitability and economics of advice keep challenging scalability. Hybrid advice models combining human engagement with digital enablement is the key.

Investor signal: Growth will happen, however, margin discipline will be the critical success factor.

7 Geopolitics and risk fragmentation

In 2026, geopolitical turbulence will see underwriting appetite and capital allocation become increasingly regionalised. This theme continues to remain a major influencer on the industry though in changing hues.

Reinsurance structures are more than ever influenced by geopolitical alignments, sanctions, climate exposure and the likes.

Strategic implication: Scenario modelling is no longer sufficient. There is a need for dynamic risk hedging.

8 Societal shifts and parametric insurance

Lifestyle and societal expectations will keep driving parameterisation. On-demand and usage-based offering will continue to expand. This in turn will lead to more regulatory scrutiny about risks and customer understanding. This is especially true for insurance envelopes that have underlying wealth components.

The need to capture consumers’ risk appetite and product knowledge and map it to investable instruments and maintain the records will not just stay a regulatory need but become a growth driver.

What changed: Consumer protection and compliance combined with growth opportunities.
What stayed the same: Demand for real-time solutions

9 Sustainability and ESG: From narrative to balance sheet

ESG needs to continue to challenge the business from compliance, consumer demand, branding and financial perspectives. It has direct influence on underwriting appetite, portfolio construction and capital access.

The industry needs to continue to walk the tight rope balancing the geopolitical challenges, societal challenges, economic realities, customer expectations and balance-sheet needs.

Executive implication: ESG strategy needs to become financially explicit

10 Cyber Risk: Focus on quantum risks

Cyber risk management continues to evolve as digital threats scale exponentially. By 2026, the conversation shifts toward quantum risk – preparing for quantum computing’s potential to disrupt encryption standards. Insurers will start developing quantum-safe risk products and collaborate closely with cybersecurity ecosystems.

Strategic implication: Cybersecurity partnerships are mission critical and need to consider quantum risks.
Investor signal: Quantum computing solutions are early opportunities

Conclusion

The insurance industry evolution for 2025 was largely in line with predictions. Digital acceleration, ecosystem thinking, ESG, and AI have all evolved more or less as expected. From 2026 perspective, these themes are expected to move onwards from innovation toward execution. Ability to operationalise ideas with control, discipline and transparency will be the driving factor going forward.

Particularly for European insurers, credibility with investors, regulators, and customers will depend on operational resilience, strong governance, capital efficiency, and sound conduct outcomes. Trust across stakeholders becomes a strategic asset by delivering consistently on these outcomes. Cyber threats, capital markets volatility and geopolitical instability and climate risks are global pressures that the industry needs to endure and adapt to form risk management perspective.

The insurance industry’s journey from 2025 to 2026 has been one of reinvention through intelligence. The coming year will reward those who balance innovation with trust, automation with empathy, and profitability with purpose. It will be about execution rather than innovation.

Want to discuss the topic or our Insurance-in-a-Box platform, covering all core insurance processes? Sameer Datye is happy to help!

References for inspiration

EIOPA (European Insurance and Occupational Pensions Authority). Supervisory Priorities and Risk Dashboard, 2025–2026. Used for regulatory focus on AI governance, claims outcomes, operational resilience.
IAIS (International Association of Insurance Supervisors). Global Insurance Market Report (GIMAR), 2025. Referenced for global supervisory themes, capital adequacy, private credit exposure, and systemic risk.
Deloitte. Global Insurance Outlook 2026. Referenced for premium growth deceleration, competition dynamics, and execution-focused strategy.
McKinsey & Company. The Future of AI in Insurance, 2025. Referenced for AI scaling, productivity impact, and governance maturity curves.
Swiss Re Institute. Global Catastrophe Loss Estimates, 2024–2025. Referenced for climate volatility, protection gap expansion, and underwriting discipline.
European Commission / Solvency II Framework Updates. Referenced for capital efficiency, ESG integration, and balance-sheet implications.
Financial Times. Global and European insurance market analysis, 2024–2025. Referenced for geopolitical risk, capital flows, and market structure changes.