Industry experts at SAS predict that the coming year will mark a major shift, with AI playing a central role in insurance companies’ operations rather than being a supporting tool. SAS, an analytics and artificial intelligence company known for its advanced data and decision-making technology, noted that this shift represents a critical moment for the industry.
For years, many insurance companies have viewed artificial intelligence as a trendy new tool: desirable and exciting, but not yet fully integrated into day-to-day operations. SAS experts now anticipate that AI will function more like an operational backbone, supporting everything from underwriting accuracy to faster, more consistent claims decisions.
This shift is unfolding as insurers deal with increasing pressures from climate change, economic instability and regulatory changes that continue to challenge long-term sustainability. SAS said these conditions make the transition to artificial intelligence processes even more important.
With just a few weeks left in the new year, SAS has outlined its expectations for the industry. Their experts look ahead to the changes, opportunities and adjustments that will impact the insurance industry in 2026.
Franklin Manchester, chief global insurance advisor, said: “Fortune 500 insurance companies will begin phasing out policy administration systems in 2026 in favor of insurance co-pilots. Some large insurance companies have already expressed interest in making significant investments in AI technology. SAS survey data shows that insurance executives have high levels of trust in generative AI, in fact twice as much as in machine learning.”
“Policy administration systems require significant investment and maintenance. However, interacting with data through Co-Pilot eliminates the need to leverage these administration systems to underwrite policies or resolve claims.”
Alena Tsishchanka, Director of Global Client Advisory, commented: “Many simple insurance claims will be resolved in minutes by agent AI. However, to maintain customer trust, insurers will need strong AI governance. This means ensuring their AI platforms have security controls and governance to minimize risks, from unintended deviations in claims decisions to exposure to cyberattacks.
“Companies that implement strong AI governance will earn and protect that trust. Building systems that act quickly and correctly will define the leaders of the next decade.”
Stu Bradley, Senior Vice President, Risk, Fraud & Compliance Solutions, added: “Insurers will become more oriented towards AI-driven actuarial modeling and decision-making. This will improve accuracy, speed and efficiency throughout the policy lifecycle, from underwriting to claims. The opportunity is twofold: make meaningful progress in closing the industry’s $1.8 trillion protection gap and build resilience in the face of escalating climate risks and economic volatility.”
Oana Avramescu, senior manager, Insurance Industry Consulting, said: “Underwriting will move from rules-based AI 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 conversation between the model and the customer, dynamically recalibrating risk as lifestyles evolve. The winners will be those who embed explainability and ethical transparency into these adaptive models.”
Thorsten Hein, a global insurance product innovation consultant, pointed out: “The accelerated pace of climate change will cause increasing damage. Insurers must strengthen their assessment of their business results and adjust risk exposures accordingly. This can be achieved by optimizing reinsurance strategies, but customers are likely to see more expensive premiums, and insurance companies may even withdraw from specific business areas. Therefore, the global insurance protection gap is likely to widen further.”
Nick Feast, Principal Business Solutions Manager, Risk, Fraud & Compliance, said: “Insurers will look to best-of-breed individual AI tools rather than an end-to-end solution. As fraudsters leverage AI to create false identities, documents and images to support fraudulent claims, insurers will look to best-of-breed tools rather than all-inclusive end-to-end solutions to help detect these risks and reduce associated losses.
“2026 will also see an increased focus on improving investigations, with insurers looking to solutions to enhance current detection efforts, including the use of co-pilots and AI agents to help automate processes and increase efficiency, allowing investigators to do more with less.”
James Ruotolo, senior director of pre-sales support, commented: “In the U.S., states will take the lead in regulating AI. As more states enact regulations, AI regulatory compliance will become more complex. Leading insurance companies will embed oversight and compliance capabilities into their AI and modeling programs.”
Norman Black, director of insurance industry solutions for EMEA, added: “Cyber insurance is already a $16.3 billion global market and will continue to grow rapidly. As the market becomes more complex, insurers will move from broad actuarial models for cyber to more targeted technology underwriting for customers. Insurers will increasingly favor customers who demonstrate and enforce appropriate security controls and governance, while rejecting those who do not.”