Insurance industry 2026: Cutting through the noise to find what really matters

As we dive into 2026, the insurance sector is buzzing with predictions and trends. There are some clear trends across the industry that tells us where it’s focus will need to be.

This insight identifies where insurance leaders must focus their attention and resources to remain competitive and compliant.

1. Customer experience is the battleground

Insurers making gains and strides in 2026 will master seamless digital experiences, proactive communication, and quick issue resolution - while keeping the human touch for complex situations.

Against the backdrop of the Consumer Duty, reduction in complaints, better complaints handling and better customer outcomes will be at the forefront of the minds of the boards.

AI will be a facilitator to achieving this.

2. AI has moved from pilot to production

The conversation has shifted from "should we adopt AI?" to "how do we scale it?" With large scale workforce adoption expected, AI is now operational across underwriting, claims, and customer service in some form or another - driving speed, accuracy, and cost reduction.

However, along with the efficiencies that AI can bring also comes risk. This risk comes in many guises whether that be around accuracy and resilience or fraud and cyber security risks. Businesses will need to be prepared for every eventuality.

3. Modernisation can't wait

Legacy systems are the anchor holding back innovation. Core system upgrades, data integration via APIs, and cloud infrastructure aren't just IT projects - they're strategic imperatives enabling everything else.

AI may assist with unlocking some of the challenges that legacy systems brought creating more of a level playing field between the well-established firms and the challenger market.

4. Climate risk demands new approaches

From California to Florida, traditional property insurance models are breaking. 

The future belongs to insurers who leverage IoT devices, smart-home data, advanced catastrophe modelling, and "predict and prevent" strategies to re-enter high-risk markets.

5. Cybersecurity: A dual challenge

The cyber insurance market continues rapid expansion as AI-enhanced attacks and ransomware threats escalate. Insurers are demanding evidence of good security practices from policyholders while refining coverage terms.

The Cyber Security and Resilience Bill is currently being discussed in Parliament. This is likely to have a bearing on the sector once the Bill is passed.

6. Regulatory shifts require proactive compliance

The UK's evolving regulatory frameworks mean compliance can't be an afterthought.

Insurers must build robust compliance programs that address sanctions screening, anti-money laundering requirements, and evolving consumer protection standards—particularly around decision transparency and fair value.

7. Talent transformation is critical

As experienced professionals retire, the industry faces a knowledge crisis. Upskilling for AI-driven environments and bridging legacy skill gaps will determine who can execute on these ambitious strategies.

The bottom line 

The insurers who act decisively on customer satisfaction, AI, modernisation, climate adaptation, cybersecurity, and regulatory compliance - while managing the legal complexities of each - will define the next era of our industry.