Insurance Predictions For 2026 Forrester Com

Bonisiwe Shabane

-Dec 27, 2025, 9:13 AM

insurance predictions for 2026 forrester com

Indranil Bandyopadhyay, Principal Analyst The global insurance industry is heading into a transformative year in 2026, with seismic shifts driven by the rise of AI, the urgency of customer experience (CX), expansion into uncharted markets such as gig-economy... The challenges are steep, but the opportunities are immense if insurers act boldly and strategically. At the heart of this transformation lies a simple truth: The insurance industry must evolve to meet changing customer expectations, counter new risks, and seize the power of emerging technologies such as AI. Here is a quick look at three predictions about the year ahead and what insurers need to do to thrive. In 2026, customer satisfaction will take center stage as insurers fight to retain clients in the face of rising premiums and growing mistrust.

Double-digit rate increases in 2025 sent shockwaves through the industry, leaving many customers frustrated and questioning their loyalty. To win them back, leading carriers will double down on CX investments, focusing on quick issue resolution, proactive communication, personalized policy options, and seamless claims experiences. The surge in natural disasters and social inflation is driving a mass exodus of private insurance from California and Florida. But in 2026, we predict that one innovative insurer will reenter these markets with a novel approach. Using internet-of-things devices, smart-home data, and incentivized risk mitigation, carriers can create personalized products for high-risk property markets. Advanced catastrophe modeling powered by AI and machine learning will pave the way for reentry into catastrophe-prone regions.

These innovations could provide new hope for homeowners struggling to secure coverage. Forrester sees 2026 as a correction year for insurers. Customer satisfaction slipped in 2025, rate hikes fueled churn, and AI is set to reshape expense ratios and underwriting. Here's what's coming - and how to get ahead of it. Forrester's Customer Experience Index for U.S. auto and home fell in 2025.

Double-digit rate increases eroded trust and made retention harder. Carriers now view CX as a direct driver of financial performance and differentiation. AI is amplifying attack speed, volume, and sophistication. Forrester says cyber carriers should move beyond reimbursement and become active partners: defense services, risk tooling, and underwriting models built for AI-enabled risk. Useful reference frameworks: NIST Cybersecurity Framework. For broader market context, see Forrester.

Growth slowed after a strong 2024. The response: automation at the core of claims and back office. Forrester recommends a focused AI strategy, strong data foundations, and embedding AI into core operations to pull down expense ratios. Forrester Research predicts written cyber insurance premiums will rise 15% in 2026 as new artificial intelligence threats and data demands emerge. In a new report, analysts at the global market research company anticipate the widespread adoption of AI to reverse the cyber market’s recent deceleration. When asked why, Rohit Makhijani, a principal analyst at Forrester, said that implementing AI increases threat surface area.

“If you’ve got a bigger house, you’re going to need more insurance,” he explained in a phone interview. “There’s more to lose.” Makhijani added that AI is enabling malicious actors to become more sophisticated. The technology has become “a weapon for bad actors” and a target itself, he said. AI’s potential to create and accelerate new threats from cybercriminals is outpacing the defensive capabilities of many organizations, the report’s authors concluded, leading to an increase in successful attacks. Insurers will prioritize customer experience in the coming year as declining customer satisfaction reveals the need to focus on retaining clients.

That was among Forrester’s predictions for the insurance industry for 2026. Meanwhile, the increased use of artificial intelligence to boost operational efficiency will result in a significant shift for the insurance industry. In addition, cyber insurance will expand rapidly to combat new threats brought on by AI. Insurers will re-enter high-risk property markets, thanks to new underwriting techniques. And micro-insurance providers will find new opportunities in the growing gig economy. Here are Forrester’s five predictions for 2026.

Carriers identify customer experience as a key driver of financial performance and a way to differentiate themselves from competitors. It’s that time of year again when every corner of the insurance world starts rolling out bold predictions about AI, automation, and climate risk. Don’t worry, we’ll cover those too. But this upcoming year has a story that runs a little deeper. 2026 isn’t just about smarter models or faster claims. It’s about a world where political volatility spills into underwriting, cyber threats keep expanding the definition of “risk,” and embedded insurance flips the value from who can sell the most policies to who can...

The chatter around what’s to come has never been louder, but the real transformation is happening behind the scenes in workflows, data models, and how insurers decide what’s truly insurable. So instead of another forecast of buzzwords, this is a look at what’s actually changing the game of insurance in 2026 (the shifts you can feel in daily operations, not just read in reports). Although for some of us, AI has already felt like such an integrated part of our daily lives, in 2026, it’s stepping up in a huge way. Insurers are embedding it into workflows and leveraging AI-driven insights to better segment clients and personalize offerings. Early adopters are already seeing 20–40% cost reductions across onboarding, claims, and back-office operations, with premium growth of 10–15% where AI helps better segment risk (McKinsey, 2025). While some industries have experimented with AI to replace employees entirely, insurance is taking a different approach by using AI to enhance human expertise.

Repetitive tasks and data crunching are handled by AI, freeing underwriters, claims adjusters, MGAs, and agents to focus on judgment, strategy, and client relationships. In a significant move to fortify its financial defenses against natural calamities, the Philippine government is collaborating with the Southeast... In 2026, insurers will prioritize customer experience to counter declining satisfaction and to focus on retaining clients. Meanwhile the insurance industry will face significant shifts driven by the increased use of AI to boost operational efficiency and the rapid expansion of cyber insurance to combat the new threats brought on by... Novel underwriting techniques will help insurers re-enter high-risk property markets, while the growing gig economy will create new opportunities for micro-insurance providers. Here are our predictions for global insurance in 2026.

Insurance Predictions For 2026 Forrester Com

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