Top considerations for US Insurers in 2026 

Inflation has eased since post-pandemic supply shocks, but remains higher than in the decade before. Interest rates are expected to continue to decline, but the pre-2020 ultra-low-rate environment is now long gone.

Overlaying these macro shifts are evolving US trade and industrial policies that continue to reshape supply chains, input costs and market volatility. Geopolitical risk and concerns about central bank independence only add to the sense of instability.

For US insurers, these dynamics reinforce the importance of balancing yield with liquidity. Higher reinvestment yields have lifted net investment income, particularly for life insurers. But with additional rate cuts on the horizon, locking in long-duration income without overstretching liquidity or taking on excessive credit risk is now a time-sensitive challenge.

The macro environment is, however, only part of the picture. What else should be top of mind for insurers in 2026?

Today’s unstable macro picture has different implications for different business lines. Life insurers are under pressure to grow premiums while navigating an environment where asset-liability matching has become more consequential, given their long-duration liabilities and heightened sensitivity to interest rate volatility.

Health insurers are contending with rising medical costs and a more complex regulatory landscape, prompting them to prioritize liquidity over incremental yield to stay responsive to fluctuating claims and capital demands.

Property and casualty (P&C) insurers are benefiting from firmer underwriting conditions, but they are not immune to inflation-driven claims severity, catastrophe volatility, or increasingly material long-tail risks such as litigation and cyber threats.

However, one theme cuts across all segments: resilience is no longer defined solely by capital adequacy. It now depends on flexibility and liquidity — being able to respond quickly and confidently as economic and market cycles shorten and shocks become more abrupt.

Perhaps one of the most transformational shift in the insurance landscape is the growing role of artificial intelligence. AI is already reshaping how insurers identify risks, model scenarios, and allocate capital.

However, it also introduces a distinct set of risks, including reliance on a small set of tech providers, regulatory uncertainty, and the potential for overdependence on models.

We believe success will depend on using AI as a decision-support tool rather than a substitute for judgment. Embedding it into existing risk frameworks, maintaining transparency around inputs and assumptions, and preserving human oversight could be critical to help prevent herd behaviour and support accountability.

Consolidation, evolving partnerships, and growing convergence with private capital are driving rapid change in the insurance investment landscape. Mergers and acquisitions among insurers and asset managers are arguably altering the competitive landscape, while private equity ownership of US life insurers continues to expand.

In our experience, insurers are building deeper relationships with asset managers to access private credit origination, alternative investments, and broader platform capabilities. These arrangements may offer potential benefits in yield, diversification, and capital efficiency, particularly given the fixed income-heavy nature of insurer balance sheets.

However, they also raise questions around governance, counterparty exposure, and concentration risk. We believe long-term success will depend on prioritizing strategic collaboration that aligns objectives, strengthens oversight, and fosters shared accountability across increasingly complex investment structures.

Unlocking capital efficiency in this landscape means breaking out of legacy silos. The traditional separation between underwriting, investments, and reinsurance — reinforced by US frameworks designed to ringfence risk — has historically supported policyholder protection. But it is increasingly misaligned with today’s interconnected risks, from cyber and climate risks to complex liability exposures.

Advanced analytics and scenario-based models now allow insurers to assess capital holistically, evaluating how different combinations of risk retention, investment strategy, and reinsurance perform under stress. This integrated view is important to deploying capital more efficiently, seeking to capture diversification benefits that siloed approaches can obscure while maintaining liquidity buffers to meet policyholder and regulatory expectations.

In 2026, we believe the ability to absorb volatility while continuing to deploy capital into emerging opportunities is no longer optional.

Insurers that combine disciplined liquidity management with thoughtful innovation across AI, partnerships, and capital strategy may be better positioned, in our view, to navigate uncertainty and capitalize on opportunities in the next cycle.