Editor's note: This article is the first installment of a multi-part series based on in-depth research from Digital Insurance on technology and business-related predictions for the insurance industry.
A new research report from Digital Insurance highlights:
- Macroeconomic trends in the industry
- Predictions for different coverage areas for insurance
- Risk landscape for carriers
Digital Insurance surveyed agents and brokers (33%), insurance carriers (59%), reinsurers (2%), adjusters (5%) and other insurance professionals (1%) from October through December 2025 to gather their predictions concerning the risks they're watching, the impact of multiple macroeconomic trends, how AI and other technologies are being integrated into their operations, and their view on payments and other digital solutions across the industry. Companies ranged in size from those with less than $1 billion in written premium (35%) to those with $20 billion or more (17%), as well as companies that fell between that range and wrote $1-5 billion (27%), as well as $5-10 billion (16%).
The survey yielded several key findings and highlighted the risk scenarios that insurance companies will be monitoring during the year.
Macroeconomic trends fuel multiple risk scenarios
While a crystal ball into the future would make it much easier to identify what's coming next, respondents to the DI survey were very clear about identifying what risk scenarios they are anticipating in 2026. Cybersecurity risks, both in terms of increased severity and frequency of attacks, was the top scenario professionals were expecting with 39% saying attacks would definitely happen and 52% believing cyberattacks would probably occur. This finding
Insurance professionals also indicated that the increased severity and frequency of cybersecurity attacks would have either a negative (35%) or very negative (43%) impact on the industry.
"Cyber threats will continue to evolve faster than most businesses can protect against them, with small and mid-sized companies emerging as prime targets for sophisticated ransomware and social engineering attacks," Rajni Kapur, CEO of All Solutions Insurance, explained to Digital Insurance last fall. "In response, insurers will adopt more dynamic underwriting models, enforcing stricter cybersecurity standards that require insureds to invest in training, multifactor authentication and ongoing monitoring. The demand for cyber coverage will accelerate, driven by regulatory mandates and the rise of AI-enabled threats."
Weather risks expected to rise
Climate risks have continued to evolve and increase in both frequency and severity. These risks were top of mind for respondents who believe a significant event is definitely going to happen (31%) or that one was probably going to happen (52%). The impact on the insurance industry was likely to be very negative (40%) or generally negative (35%). Carriers had a slight respite from severe hurricanes across the U.S. in 2025, which allowed companies to recover from previous years, but total losses from natural disasters in the U.S. were still
Lauren Menuey, managing director of Goosehead Insurance, told Digital Insurance that the unpredictability of weather will continue to be a challenge in 2026. "Carriers cannot predict the weather, so while most feel they have the right product and pricing in most markets today, that could change if weather related losses mirror 2024 vs. 2025, a relatively low CAT year, which was good for carrier profitability."
The impact of tariffs on insurance
The continued volatility associated with the tariffs imposed on countries around the globe was identified by 38% of respondents as definitely going to happen, while 52% believed it was probably going to happen. The impact on the insurance industry from the tariffs was viewed primarily as negative (34%) or very negative (22%) with only 33% of respondents believing the effect would be neutral. How insurance carriers report these risks and their impact is also important in terms of transparency and regulatory compliance.
Jeremie Saada, head of U.S. Executive Risk at Beazley, told Digital Insurance, "A new challenge is emerging in corporate disclosure: determining the appropriate timing and approach for publicly reporting on tariff impacts, mitigation strategies, and financial implications amid rapidly evolving trade policies. 'Tariff-washing' is poised to become the latest in a series of disclosure pitfalls, joining terms like 'greenwashing' and 'AI-washing' that underscore the risks of miscommunication or omission regarding the impact of tariffs on a business.
Whether companies overstate or understate these effects, the consequences are often the same: legal exposure, reputational damage, and loss of stakeholder trust. Today's public comment and disclosure will be held to a standard. To navigate these risks effectively, insurers and compliance teams must collaborate to ensure future risks are communicated transparently and responsibly, reducing the likelihood of regulatory scrutiny or legal action."
Other government-related factors that insurance professionals predicted could occur in 2026 involved the government reducing federal disaster funding with 54% predicting it would probably happen and 26% believing it would definitely occur. Twenty-one percent said there was the likelihood that FEMA would be dramatically reduced or dismantled and 48% believed it would probably happen.
Growth opportunities ahead
While insurers anticipate growth with certain risks, this will also provide opportunities for them to create new products and services related to these areas. Eighty-six percent of respondents anticipate moderate to high growth in the cybersecurity space. However, they see only 37% of moderate growth and 18% of high growth in terms of growth for property disasters like floods or earthquakes. Commercial insurance is expected to see 44% in moderate growth and small business insurance is expected to see a slightly smaller increase at 40%. Collectively, 84% of insurance professionals anticipate some aspect of growth for their companies with 37% predicting limited growth and 38% expecting moderate growth.
