It’s that time of year again and IE will be featuring a wide range of predictions across the insurance sector. Let’s kick off with a comprehensive set of insights from Clyde and Co;
Today, global law firm Clyde & Co releases its predictions for the insurance industry in 2026, setting out the key emerging risk areas expected to shape the market in the year ahead.
Drawing on insight from the firm’s global network of partners, the analysis provides a forward look at the issues likely to demand insurers’ attention as the global risk landscape continues to shift over the next 12 months.
Clyde & Co’s emerging risk predictions for insurers in 2026:
- Social media addiction
- Space
- Next generation nuclear
- Sanctions
- Head office liability
- Litigation funding
Neil Beresford, Partner and lead of Clyde & Co’s Emerging Risks programme, London, comments:
“The risks faced by insurers in 2026 and beyond are evolving rapidly and present both challenge and opportunity.
“Emerging risks such as head office liability and the growing influence of litigation funding are reshaping corporate risk profiles, while technological and geopolitical developments, from next-generation nuclear energy to expanding space activity and tightening global sanctions, are adding further complexity.
“At the same time, shifting social behaviours, including the rise of social media addiction, are creating more liability risks for insurers linked to mental health. By anticipating these emerging risks and adapting swiftly, insurers can not only protect their clients but also strengthen their own resilience.”
- Social Media Addiction
With social media platforms integrating more AI functions, including AI chatbots, insurers should be aware of evolving and expanding risks associated with claims alleging mental health issues or instances of physical harm prompted by users’ interactions with AI. The interactive nature of AI functions in social media will present new challenges in how insurers evaluate risks associated with their use.
Katelin O’Rourke Gorman, Partner, Clyde & Co, New York, says:
“The rise in social media addiction lawsuits in the U.S. is creating significant liability risks for insurers and could trigger a global ripple effect. These cases claim platforms are intentionally designed to encourage addictive behaviours, causing serious mental health issues for children – and indeed, some jurisdictions have mandated warning labels. For insurers, this trend highlights the need to reassess product liability exposure and adopt proactive measures from revising policy wording to tightening risk selection. Staying ahead of this evolving litigation is essential to protect profitability and reputation. And with early signs that similar challenges could emerge elsewhere, global preparedness is key.”
- Space
As commercial space activity accelerates and satellite networks become more integral to global infrastructure, insurers in 2026 face a new frontier of risk.
Kevin Sutherland, Partner and Global Head of Aviation, Clyde & Co, San Francisco, comments:
“From orbital debris and cyber threats to a shifting patchwork of global regulations, insurers in 2026 must innovate and adapt to underwrite this fast-evolving sector. The space and satellite industry is emerging as a dynamic frontier, driven by advances in satellite broadband, earth observation, and space tourism, all fuelling demand for new risk-transfer solutions, much like insurance has historically enabled growth in aviation and maritime. Yet space risks challenge traditional norms: they are rare but potentially catastrophic, actuarial data is scarce, legal frameworks remain unsettled, and accumulation risks, such as debris cascades, are unprecedented.”
- Next generation nuclear
While governments and private investors accelerate the transition to low-carbon energy, nuclear power is being positioned as a cornerstone of energy security and climate resilience.
Corey Greenwald, Partner, Clyde & Co, New York, comments:
“As next-gen nuclear technologies scale, insurers face the challenge of underwriting complex, evolving risks. By investing in specialised coverage, cyber resilience, and early-stage advisory, insurers can play a pivotal role in de-risking innovation and enabling the sector’s growth.“
- Sanctions
As geopolitical tensions and new sanctions packages continue to dominate headlines, managing sanctions risks will remain as critical as ever for insurers in 2026.
Chris Hill, Partner, Clyde & Co, London, comments:
“The complexity and pace of evolving sanctions regimes, particularly following the escalation in energy and marine-related measures, heightens the risk of inadvertent non-compliance in multinational and reinsurance programmes. Insurance clients should ensure robust sanctions screening and keep compliance frameworks up to date.”
- Head office liability
Globalisation has led to carefully planned parent company corporate structures designed with clear boundaries for finance, management and liability to mitigate against increasing overseas subsidiary risks.
Daniel Le Roux, Partner, Clyde & Co, Johannesburg, explains:
“We have seen an upsurge in claims seeking to bypass corporate structures and hold parent companies directly accountable for the actions of their subsidiaries overseas. For insurers, this emerging risk of head office liability means greater exposure under Directors’ & Officers’ liability and corporate liability policies, as parent companies face increased litigation and regulatory scrutiny for global operations.”
- Litigation funding
The biggest risk associated with the rapid growth of litigation funding is the lack of transparency and potential conflicts of interest, which can undermine the integrity of legal proceedings.
Paul Wainwright, Partner, Clyde & Co, Manchester, comments:
“Litigation funding remains a powerful enabler of access to justice, but its rapid growth demands greater transparency. While most jurisdictions recognise the need for disclosure, inconsistent enforcement creates challenges in multi-jurisdictional cases. These complexities raise emerging risks for insurers, particularly around liability exposure, regulatory compliance, and reputational impact. Insurers should proactively monitor evolving disclosure rules, review policy wording for funded claims, and engage with clients on risk management strategies to ensure clarity and mitigate potential disputes.”
Clyde & Co’s global Insurance practice comprises highly specialised teams with expertise across every aspect of insurance and reinsurance, from the smallest claim to the most complex loss. With more than 70 offices across six continents, we operate in virtually every major insurance hub worldwide, serving clients in both developed and emerging markets.
Recognised as a market leader, Clyde & Co is trusted by insurers, reinsurers, brokers, and policyholders to resolve complex coverage disputes, defend claims, and deliver comprehensive claims handling services. We regularly act in high-value litigation and arbitration, providing clients with strategic, results-driven solutions.
Clyde & Co advises on a broad spectrum of traditional and emerging insurance lines, including aviation, casualty and healthcare, cyber, energy and engineering, financial institutions/D&O, fraud, marine, professional indemnity, property, product liability, and political risk.
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