SAS’ industry experts anticipate that the coming year will mark a significant shift, with AI moving into a central role in how insurers function and no longer serving as a secondary aid. SAS, an analytics and AI company known for its advanced data and decisioning technologies, notes that this transition represents a pivotal moment for the industry.
This transformation is unfolding while insurers contend with rising pressures from climate change, economic instability, and regulatory shifts that continue to challenge long-term sustainability. According to SAS, these conditions make the transition to AI-enabled processes even more essential.
With only weeks left before the new year, SAS is already outlining what the industry should expect. Their experts are offering a look ahead at the changes, opportunities, and adjustments that will shape insurance in 2026.
Franklin Manchester, Principal Global Insurance Advisor, said: “A Fortune 500 insurer will begin phasing out policy admin systems in favour of insurance copilots in 2026. Some large insurers have already signalled their intent to invest big in AI technologies. And SAS’ survey data shows that insurance executives have a high level of trust in generative AI – twice as high as for machine learning, in fact.
“Policy admin systems require substantial investment and upkeep. However, interactions with data through copilots can eliminate the need to utilise those admin systems to underwrite policies or settle claims.”
Alena Tsishchanka, Global Customer Advisory Director, commented: “Many straightforward insurance claims will be settled in minutes by agentic AI. In order to safeguard customers’ trust, though, insurers will need strong AI governance. That means ensuring that their AI platform has the security controls and governance to minimise risks, from accidental bias in claims decisions to exposure to cyberattacks.
“The companies that install robust AI governance will earn and protect that trust. Building systems that act fast – and act right – will define the leaders of the next decade.”
Stu Bradley, Senior Vice President of Risk, Fraud & Compliance Solutions, added: “Insurers will lean harder into AI-powered actuarial modelling and decisioning. This will result in improved accuracy, speed and efficiency across the policy life cycle, from underwriting through claims. The opportunity is twofold: meaningful progress in narrowing the industry’s $1.8 trillion protection gap and greater resilience in the face of escalating climate risk and economic volatility.”
Oana Avramescu, Senior Manager of Insurance Industry Consulting, said: “Underwriting will move from rule-based to relationship-based AI. Insurers will rely on AI systems that learn from longitudinal customer data rather than static rules. This shift will turn underwriting into an ongoing dialogue between models and customers, recalibrating risk dynamically as lifestyles evolve. The winners will be those who embed explainability and ethical transparency into these adaptive models.”
Thorsten Hein, Global Advisor for Insurance Product Innovation, noted: “The accelerating pace of climate change will cause increasing damage. Insurers must increasingly evaluate their business outcomes and adjust their risk exposure accordingly. This can be achieved by optimising reinsurance strategies, but there’s a good chance customers will see more expensive premiums, and insurers may even withdraw from specific business areas. Consequently, the global insurance protection gap is likely to widen further.”
Nick Feast, Principal Business Solutions Manager for Risk, Fraud & Compliance, said: “Insurers will seek out the best individual AI tools rather than one end-to-end solution. As fraudsters use AI to create false identifies, documents and images to support fraudulent claims, insurers will be looking for best-of-breed tools – rather than all-encompassing end-to-end solutions – to help detect these risks and reduce related losses.
“2026 will also bring an increased focus to improving investigations, with insurers looking to augment their current detection efforts with solutions that include the use of copilots and AI agents to help automate processes and drive efficiencies, allowing investigators to do more with less.”
James Ruotolo, Senior Director of Presales Support, commented: “In the US, states will take the lead in regulating AI. AI regulatory compliance will become more complex, with more states enacting regulations. Leading insurers will embed oversight and compliance features into their AI and modelling programmes.”
Norman Black, Insurance Industry Solutions Director, EMEA, added: “Cyber insurance, already a $16.3 billion global market, will continue to grow rapidly. As the market becomes more sophisticated, insurers will move from generalised actuarial modelling for cyber to more targeted technical underwriting on a client-by-client basis. Insurers will increasingly favour those clients that exhibit and enforce proper security controls and governance while denying clients that do not.”
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