NTT DATA has published its Insurtech Global Outlook 2026 report, which says the insurance sector is at a structural inflection point.
The findings point to a widening gap between rising uninsured risks and the industry's ability to respond. Cyber exposure is now identified as the largest source of uninsured loss, while climate-related losses are also mounting.
The report projects uninsured cyber losses will rise from USD $171 billion in 2023 to more than USD $700 billion by 2030. Climate-related uninsured losses, including those linked to extreme weather, floods and wildfires, now stand at USD $180 billion, while liability claims have increased by 57%.
These pressures are emerging as insurers also try to turn growing staff use of artificial intelligence into working systems across their businesses. The report found that 66% of insurance employees use AI tools, but only 22% of insurers have scaled AI into production.
The main barriers are not the tools themselves, but issues of trust, governance and operating models that were not built for AI. The report argues that insurers need to rethink processes if they want AI to move beyond trials and isolated deployments.
Capital shift
The study also highlighted changes in insurance financing, particularly in the US market. US insurance initial public offerings have reached a 20-year high, while debt funding has overtaken equity financing.
Debt financing for insurance start-ups reached USD $9.5 billion, the report found. That suggests newer companies are increasingly turning to borrowing rather than equity capital at a time when investors remain selective and insurers face pressure to show a clear path to profitability.
Another theme is the shift in insurers' role from paying claims after losses occur to identifying and preventing risks earlier. Insurers are being pushed towards continuous risk detection, decision-making and prevention as insured capacity struggles to keep pace with the scale of emerging threats.
The report also pointed to changing customer and employer expectations. Hyper-personalisation is growing at more than 35% compound annual growth, while 67% of employers are increasing prevention spending, indicating demand for more proactive insurance models.
AI bottleneck
While the report outlined potential savings from greater automation and process optimisation, it made clear that adoption remains uneven. AI-native and agentic operations could reduce costs by as much as 35% for insurers, but only if firms can overcome internal resistance and build frameworks that support explainability, compliance and human accountability.
This reflects a broader tension in the sector. Many insurers have introduced AI tools at workforce level, but far fewer have embedded them deeply in underwriting, claims, operations or customer service in a way that can be scaled safely.
The report said ecosystem partnerships are becoming more important as insurers seek new routes to growth and product distribution. It added that the embedded insurance market exceeded USD $116 billion in 2025, supported by open standards and infrastructure designed to meet regulatory requirements.
This puts insurers under pressure to adapt not only to more frequent and costly risks, but also to shifts in distribution, customer behaviour and funding markets. The study presents these trends as interconnected rather than separate developments, with operational resilience, technology governance and capital strategy increasingly tied together.
Bruno Abril, Global Head of Insurance at NTT DATA, set out the firm's view of the market: "The insurance industry is facing structural shifts in the face of unprecedented market volatility and uncertainty. There are, however, clear opportunities for insurers to embrace AI-driven solutions to bolster trust and resilience."
He added: "In this report, we identify the key shifts that are shaping insurance in 2026 and translate them into actionable imperatives that can help insurers build long-term value for their businesses, their customers and society."