Insurance in 2026 - Q1 Reality

Compliance, supervision, responsible usage, resilience, explainability are the main conversations today about AI. In Q1 we have moved beyond the PoCs and “lets test it phase”.

Safety and transparency are the main topics for insurers from not only EIPOA’s 2026 agenda but also from a wider marker commentary. Governance is clearly superseding novelty. 

Insurtech investments get more mature

Investments in AI and B2B models seem to attract the money. Nevertheless, the market seems to be more selective than expansive. Market commentary has been about having better fundamental M&A logic and also more capability demonstrable deals and yet February counted for over $1 billion in InsurTech funding. Business logic, distribution and scaling are what the market loves, however, innovations are still attracting enough attention.

In Q1, FCA has published guidelines and rules on 3^rd party and operations incident reporting. Furthermore, the Europea commission has strongly pushed for reliance in the light of geopolitical, natural and cyber disruptions situations. Thus, legacy and operations resilience in Q1 have moved away from being a IT housekeeping need. Legacy systems, outsourcing value chain and infrastructure need to be viewed as business risks.

AI is moving the focus from head count to productivity. Talent is still very much in demand especially in technology, underwriting and claims. However, Q1 labor data suggest that the focus in on how execution happens rather than blanked hiring. The human aspect seems to be getting more prominence as a result.

QBE’s live embedded underwriting is a good example on how ecosystems are expanding – especially in the area of embedded insurance. At the same time accountability and deliverability pressure on the ecosystems increase. Regulators are very focused on the ensuring third party risks and operations visibility. It is not the question of “if we should partner”, it is more a question of “will we be able to stay in colterol in the partnership to ensure accountability”.

Continued impact of the Great Wealth Transfer

Millennials and GenZ investors are influencing the change related to technology, personalization, advice and overall expectations according to research in Q1. This supports the original hypothesis of the continued impact of the Great Wealth Transfer. However, the more difficult part is yet to follow- the need to have scalable, profitable models that leverage technology and yet provide the comfort of “human in the loop”.

Geopolitics remains an increasingly relevant factor and Q1 was a testament towards the same. Geopolitical tensions are explicitly highlighted in the risk assessment of ECB and inflation is expected to spike in Q2 in relationship to the Middle East crisis. As proposed in the original point, for the insurance industry, geopolitical risks are not just a background variable. It has a direct impact on risk appetite, inflation assumptions, cyber exposure and capital thinking.

For parametric and real-time protection, I would say that the direction is still relevant, however there has been nothing dramatic in Q1. Nevertheless, there have been some datapoints that reinforce this trend like Hannover Re’s renewed parametric cloud outrage protection. The relevance if this is reflected in the fact that the market is still very much interested in the data driven, more precise and faster products.

ESG and sustainability - more pragmatic approach

Though the ESG and sustainability trend seems to be moving to become more pragmatic and less rhetorical. In Q1 the markets demant was to be more concrete, financially explicit and lighter to operationalise. This theme has certainly not disappeared.

The quantum angle is still early but cyber risk still remain relevant. In Q1 we have seen specialist commentary and market outlooks corelating future cyber insurance challenges to quantum encryption risk. Nevertheless, it has still not gathered enough steam to consider it a dominant live trend yet.

The prediction of Q1 2026 published earlier seem to be broadly right. AI, ecosystems, digital distribution ESG and new protection models are certainly relevant for the insurance sector. However, the early movers seem to those who can covert ideas in to auditable, resilient and discipled business models with “humans in the loop” trust based approach.

 My insurance trend scorecard

Scale: 1 = clear deviation from the original prediction, 2 = weaker than expected, 3 = partially confirmed or mixed, 4 = mostly confirmed, 5 = strongly confirmed by Q1 developments.