Technology is shaping and reshaping a host of industries, and insurance is no exception. A new study from Digital Insurance finds that 78% of insurance companies and 60% of brokers anticipate increasing their technology spending in 2026. Part one of this multi-part series identified
The study 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 macroeconomic trends, and how AI and other technologies are being integrated into their operations. 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%) and $5-10 billion (16%).
Investing in technology, people and more
Insurers and brokers are making a significant investment in technology in 2026 with almost 70% of respondents saying they anticipate increasing their spending anywhere from 1% to 20% or more. Approximately 13% didn't know how their spending would change and 16% anticipated it staying about the same. Only 2% said they would decrease their spending.
There was a slight difference between the areas where carriers, agencies and brokers are investing this year. Carriers are spending 49% of their budgets on technology (software, AI, digital transformation); 32% on hiring, retaining and retraining their employees; and 8% on mergers and acquisitions. For brokers and agencies, the percentages shift slightly with 48% invested in people and expanding their workforce, 30% on technology, and 6% on their physical infrastructure. However, 12% of the agencies and brokers indicated they weren't planning on making any investments at this time.
Issues most likely to affect the insurance industry
Respondents were queried on several factors that could affect the insurance industry in 2026 and 72% said that the lack of affordable options for customers in need of disaster insurance was a significant issue, followed by 58% who said that social inflation and its impact on jury awards and increased litigation was a problem.
While 57% of survey respondents were concerned about AI-based fraud, 33% saw it as a smaller issue compared to other risks. Respondents were almost equally split on the younger generation's knowledge of their insurance needs (41% saw it as a big issue as opposed to 46% who viewed it as a lesser issue).
Implementing new technologies
Technology provides carriers with greater access to data, which enables more accurate underwriting and proactive management of some risks. Parametric insurance coverage is automatically triggered based on specific, predetermined data and provides a level of protection against large-scale weather events. Nikki Devlin, CEO and co-founder of RIC, shared in a Dig-In podcast that parametric insurance "
The survey explored what types of innovations the companies have initiated and 24% indicated they had introduced digital-first technology platforms, while 28% anticipated launching them this year.
In the auto space, usage-based insurance has shown some growth, but only 21% of companies said they are currently using it and 15% said they would implement it in 2026. Embedded insurance, which can be purchased at point of sale for everything from airline tickets to automobiles, is only being used by 12% of the respondents and 17% said they plan to provide it this year.
For some innovations, carriers and brokers had similar implementation strategies, but there were differences in some areas. While both offered hyper-personalized policies (22% insurers vs. 21% for brokers and agencies), carriers definitely had a greater ability (27%) to offer digital-first technology platforms compared to brokers and agencies (15%).
The availability of usage-based insurance also differed with 27% of carriers and only 15% of agencies and brokers providing this option. Interestingly, 12% of agencies and brokers offered parametric insurance, compared to only 7% of carriers.
Disruption and technology predictions for 2026
While the insurance industry may have once had the reputation of being slow to change and adapt, the integration of digital technology and the adoption of artificial intelligence are
Cybersecurity and threat intelligence tools were cited by 53% of respondents, Generative AI was cited by 52% and Agentic AI by 24%. Fraud mitigation and prevention tools (32%) will also change the way carriers operate.
The survey also asked about how AI would impact different areas of the insurance industry, with many respondents recognizing that it's already affecting their businesses and the industry as a whole (30%), the customer experience (52%), risk assessments (37%), internal operations (34%), pricing (33%), claims processing (30%) and underwriting (29%), but they also anticipate AI having a significant effect on all of these areas in 2026 and beyond.
"While we expect AI to continue to be woven into workflows to increase employee efficiency, the businesses that will succeed with AI in 2026 will be the ones that leverage AI to solve the biggest problems that their organizations face," Greg Chandler, executive vice president of information technology at The Standard, told Digital Insurance in an earlier predictions article.
As carriers and agencies look at what lies ahead, artificial intelligence and other technologies will definitely be a part of their futures.
