Insurers enter 2026 as volatility shreds planning: EY

Boards are reassessing underwriting customer experience and decision making as data security slows adoption.

Insurers are heading into 2026 facing a more uncertain and volatile environment, shaped by economic and geopolitical pressures, intensifying competition, new capital flows, rapid technological change and fragmented regulation, according to EY’s 2026 Global Insurance Outlook.

EY said traditional growth paths are narrowing, prompting insurers to pursue mergers and acquisitions to gain scale, capabilities or access to new markets. 

Specialty insurance and more flexible product designs, including modular life and annuity products, remain key growth areas. 

At the same time, insurers are divesting non-core books to free up capital, with management teams taking a more disciplined approach to where they compete.

Artificial intelligence remains central to strategy, but EY noted that most insurers have yet to see returns beyond efficiency gains. 

Boards are reassessing how artificial intelligence can drive wider value, particularly in underwriting, customer experience and decision-making, whilst data quality and security continue to limit faster adoption.

Market conditions are expected to soften across most lines, with slower premium growth and continued cost pressure.

Insurers are responding through greater automation and alternative sourcing models, though EY warned that poorly targeted cost cuts could undermine future growth.

Private capital is playing a larger role in reshaping the industry, especially in life, annuities and parts of the property and casualty market. 

In the US, the number of private equity-owned insurers increased from 90 in 2018 to 137 in 2024, with invested assets more than doubling. EY said insurers must now decide how best to partner or compete with these players.

Workforce constraints, particularly in data, AI and specialist underwriting, remain a key challenge. 

EY said insurers that continue to invest in digital capabilities, talent and disciplined capital allocation are better placed to manage uncertainty and support longer-term growth.