Five priorities for insurers: converting uncertainty into opportunity

As we highlight in the 2026 EY Global Insurance Outlook, the challenge for C-suites and boards is to think differently about what’s ahead. Committing to bold innovation, confronting hard decisions about capital allocation, deploying technology in creative ways, and undertaking workforce and business model transformation — that’s what it will take to navigate current market complexities and seize the many compelling opportunities that this dynamic market presents. This article outlines five priorities for the insurance sector to thrive in 2026 and beyond.

1. Finding the right path to growth

With traditional growth paths narrowing, insurers are exploring diverse strategies to expand the business. The considerable barriers to organic growth are expected to drive an uptick in mergers and acquisitions (M&A) activity. Transactions are designed to serve a range of purposes: 

• Bolt-on acquisitions to gain access to specific capabilities or technologies (e.g., through InsurTechs, managing general agents (MGAs) or “acquihires”)
• Vertical integration for more control of the entire value chain (e.g., health insurers buying clinics and treatment facilities, automotive carriers buying repair shops)
• Economies of scale (e.g., consolidation among brokers and within the specialty market)

M&A also facilitates geographic expansion as firms look to enter politically stable regions with relatively low market penetration and transparent regulatory environments. Japanese insurers have been particularly active in exploring new international markets. 

Certain lines of business (particularly specialty) offer promising growth prospects. Product innovation aligned to evolving customer needs and market segments may also spark growth, provided carriers can accelerate development cycles. Modularized life and annuity products that can flex for accumulation and decumulation phases are a priority for some carriers. Commercial and group insurers are engaging clients to co-create tailored solutions (e.g., prevention and analytical services for captives, customized employee benefits packages). 

In the spirit of “less is more,” some firms are divesting non-core books to free capital to invest in higher-growth lines and targeted geographic moves. In C-suites across the industry, there is a sense of greater discipline than in the recent past. Insurers are rigorously assessing where they have the best chance to compete and win, rather than reaching for top-line growth across multiple markets and product categories. 

2. Refreshing the AI strategy around long-term value

Insurers are going all in on artificial intelligence (AI), but meaningful returns beyond incremental efficiency gains have yet to materialize. Boards and C-suites are rethinking core AI strategies as they come to terms with the scope of change necessary to realize the transformative potential. Unlocking enterprise-level value requires redesigning key customer experiences, embracing dynamic underwriting, and establishing faster, more agile decision-making processes. The mainstreaming of agentic AI will further raise the stakes, necessitating new processes and workflows, new skills, and even entirely new operating models, all designed to more effectively serve customers. 

It's still early days in the AI revolution. But there is increasing urgency to address the data quality, security, and accessibility challenges that remain the largest barriers to scaling AI. Action plans must be flexible to account for multiple future pivots — strategic, operational, and technological — as AI continues to advance. Consider how tech environments will mix off-the-shelf AI tools with embedded offerings from platforms (e.g., SaaS, ERP) and proprietary tools. 

Finally, neurosymbolic AI will open new possibilities and create further incentives to reimagine how insurers deliver value, serve customers and grow. The meaning of productivity and value will fundamentally change, as will key performance metrics. We believe AI use cases that elevate the human element of the business and help people do their jobs more effectively are the most likely to become killer apps. 

3. Preparing the business for market softening and ongoing uncertainty

There is broad consensus among analysts and stakeholders that most lines of business face softening conditions. Premium growth is expected to stall, while higher costs and fluctuating interest rates squeeze margins. Geopolitical tensions, tariffs, strained trade alliances, and regulatory fragmentation across jurisdictions increase uncertainty and undercut decision-making confidence. 

In such situations, the standard response is often cost takeout. Done right (and strategically), cost optimization efforts free capital for necessary investments (e.g., product innovation, digital transformation). But firms that overreach and cut indiscriminately will limit future opportunities when market conditions turn more favorable, as they inevitably will. Executing cycle management playbooks, including portfolio steering and increased strategic and operational discipline, will put senior leaders in the spotlight; courageous leadership is necessary in the face of tough decisions (e.g., exiting some businesses, saying no to risky partnerships).

To address rising expenses, carriers will look to automate more functions and explore strategic sourcing options, including managed services and global capability centers. Here again, lower expenses aren’t the only measure of success; the right sourcing models can provide access to new capabilities, tools, and talent and boost operational flexibility, which are potential difference makers in tight markets. 

4. Engaging with private capital — partnering, competing, or both

The dramatic expansion of private equity (PE), private credit, and other “alternative” capital providers in insurance might be the industry’s noteworthy recent development. It’s no exaggeration to say that they’re redefining the insurance business, fueling innovation in product design and distribution, risk transfer, and capital management. Their presence in the life and annuity business, coupled with growing reinsurance capacity and broker consolidation, has redefined the competitive landscape. In the broader property and casualty (P&C) market, their influence is most notable in the growth of catastrophe bonds and the rise of MGAs. 

For incumbent carriers, there’s never been more reason to partner with private capital providers. Their skill and sophistication in deploying balance sheets, asset-and-liability matching, origination capability, analytics, and other areas provide many valuable lessons for carriers, as well as huge potential upside within the right partnerships. Of course, the competitive implications can’t be overlooked or underestimated. 

Private capital is here to stay. It’s no longer a question of whether to engage with these firms, but how. That means identifying the right partners — including PE and traditional asset managers — for creative collaborations and mutually beneficial investments, based on complementary capabilities and common goals.