Yes, the Predictions 2026 series continues. Insurance and insurtech specialist Best Insurance has made four predictions of what technology and product innovations we can expect to see next year.
- Digital-first distribution will become default
- AI underwriting will accelerate
- Regulation means automated claims processes with real-time status updates will take-off
- Expect more product innovation, partnerships and white label solutions
Over the past 12 months, insurers have already made steps to accelerate digital enhancements across pricing, underwriting and claims. Kesh Thukaram co-founder at Best Insurance and founder of AI underwriting platform excitare.ai, has picked out four key trends we should look for in 2026.
Digital-first distribution will become default
Advancements in technology and AI will continue to transform underwriting and distribution in 2026, with insurers expected to roll out smoother, faster digital journeys for both advisers and customers. This will make insurance products much easier to buy especially in areas where consumers favour digital self-serve options.
For advisers, digital portals will become far more useful and sophisticated, moving beyond basic quote tools to include features such as case tracking, automatic updates, better product comparisons and links to CRM and back-office systems. This will reduce admin, speed up decision-making and improve data quality for insurers.
At the same time, consumer awareness and demand for non-advised, online protection solutions also looks set to grow, especially in the life and income protection markets, as more customers seek out quick, convenient online services instead of traditional advice-led channels.
These changes will create a clear divide in the distribution market and those advisers slow to modernise may find themselves facing higher costs and tighter margins. Others may seek to partner with firms who can offer better technology, faster turnaround times and simpler underwriting processes.
AI underwriting will accelerate
Underwriting is likely to see the strongest impact of AI in 2026 as insurers continue to focus on automation and the use of AI for case management, pre-populating information, achieving more real-time decisions and creating fewer touchpoints.
This trend will expand even further across all types of personal lines insurance and become increasingly more commonplace in protection, enabling quicker and more consistent decision-making.
However, in complex and non-standard insurance cases, such as those involving medical or mental health risk factors, challenges are still likely to arise. A changing labour market, such as a shift towards freelance and a gig-economy workforce will also complicate risk modelling even further. Therefore, many insurers will need to balance risk appetite with speed and simplicity and will continue to rely on manual underwriting for more complex cases.
Regulation means automated claims processes with real-time status updates will take-off
Ongoing regulatory change and the rules around Consumer Duty will influence product design and distribution in 2026, with a stronger emphasis on transparency and customer outcomes.
Claims performance will also remain under the microscope, with customers and regulators demanding better outcomes, and faster and fairer settlements.
As a result, insurers will invest heavily in automated claims processes, real-time status updates and digital evidence capture. Those that remain focused on delivering these outcomes and successfully improve the claims process will gain a competitive advantage over their peers.
In contrast, those who fail to improve transparency and responsiveness will struggle with client retention, especially in the more commoditised personal lines sector where switching providers has never been easier.
Expect product innovation, partnerships and white label solutions
With consumer expectations for flexibility continuing to increase, 2026 is also likely to open up opportunities for innovation in mental health and modular protection offering flexible cover and add-ons.
Insurers that can offer greater flexibility and more modular and personalised insurance options, such as cover that can be adjusted, extended or pared back as a person’s circumstances changes over time, will stand out.
This also extends to mental health support, where preventative support, early intervention tools and access to therapies and wellbeing solutions will become an important differentiator.
Meanwhile, partnerships and white label solutions are also likely to become more commonplace as insurers look to reach new audiences via digital platforms, affinity groups, and non-traditional distributors.
Commenting, Kesh Thukaram co-founder at Best Insurance said: “In 2026, the pace of digital transformation across the insurance market looks set to increase even further. Tapping into this trend is essential for those wishing to remain relevant.
“Distribution, underwriting and claims are already heading towards smarter, faster, automated processes, and those who continue to invest and adapt quickly will achieve better customer outcomes and a greater competitive edge.
“Consumers today want quick, simple, online solutions and insurers and advisers that can deliver these demands will reap the greatest rewards. While certain challenges such as complex unwriting cases may slow down any developments, those who fail to adapt may find themselves struggling to keep up in a rapid-changing market.”
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