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Insurance Investment Priorities for 2026
How Capital Pressure, ROI Discipline, and Execution Risk Are Reshaping Where Insurers Spend Next
I. Introduction
Insurance leaders heading into 2026 are not short on conviction—but they are short on margin, patience, and room for error.
Across underwriting, claims, distribution, and technology, capital allocation decisions are becoming sharper and more consequential. Loss volatility remains elevated, reinsurance economics are tighter, and customer expectations continue to rise. At the same time, insurers are deep into multi-year modernization efforts that promise transformation but often deliver value unevenly and slower than planned.
This creates a familiar but increasingly acute dilemma: where should insurers invest next to protect margins today without undermining long-term competitiveness?
To explore how this question is being answered in practice, this report draws on three proprietary microsurveys of insurance leaders across roles and seniority levels. Rather than asking what should matter, we focus on what leaders are actually prioritizing—where budgets are growing, where cost pressure is most acute, and where decision-makers expect the fastest return on new investment.
The results reveal a nuanced picture. Data and analytics sit at the center of nearly every investment narrative, yet expectations for near-term ROI remain firmly anchored in fraud detection, claims automation, and customer experience. Underwriting technology is viewed as strategically critical at the executive level, but operational leaders remain cautious, constrained by cost scrutiny, implementation complexity, and delivery risk. Meanwhile, cost pressure itself is fragmenting across the organization, with reinsurance dominating board-level concern and technology spend emerging as a frontline challenge.
Taken together, the findings point to a broader shift underway. Insurers are not retreating from transformation—but they are sequencing it. Capital is increasingly flowing toward initiatives with clear attribution, lower regulatory friction, and faster feedback loops, creating momentum where returns are most visible while larger bets are deferred or re-scoped.
This report unpacks what that sequencing looks like in practice, where misalignment across roles is slowing progress, and how insurers can navigate 2026 planning cycles with greater clarity and discipline. The goal is not to prescribe a single strategy, but to surface the real tradeoffs shaping insurance investment decisions today—and the implications for those who get them right, or wrong, in the year ahead.
II. Where Insurance Budgets Are Growing Fastest in 2026
As insurers head into 2026 planning cycles, technology investment priorities are becoming sharper—and more strategic. Margin pressure, underwriting volatility, and rising customer expectations are forcing carriers to decide not just how much to spend, but where that spend will have the biggest impact.
Insights from a recent microsurvey of our insurance newsletter audience reveal a clear hierarchy emerging across the organization, with analytics and underwriting modernization at the center of next year’s budget growth.
Data & Analytics Leads Overall Spend Increases
Across all respondents, Data & Analytics is the top area slated for budget growth, cited by 44% of participants. This reflects the industry’s continued push toward more disciplined pricing, improved risk selection, and better portfolio steering—especially in an environment where small underwriting errors are quickly magnified.
Close behind, Distribution and agent tools account for 31% of planned budget increases. Even as digital channels mature, insurers continue to invest in broker enablement, CRM modernization, and tools that improve quote-to-bind speed and producer productivity.
Executive Focus: Underwriting Technology Takes Priority
At the senior leadership level, priorities shift meaningfully. Among C-suite respondents, Underwriting technology emerges as the clear leader, with 50% identifying it as the primary area for budget growth.
This underscores a strategic push to modernize core underwriting systems—embedding automation, rules engines, and AI-assisted decisioning to improve loss ratios while scaling efficiently. For executives, underwriting technology is no longer just an operational upgrade; it’s a margin defense strategy.
VPs and Directors: Balancing Growth and Execution
Among VPs, investment priorities split evenly between Data & Analytics and Distribution / agent tools, each at 50%. This reflects a focus on execution—using data to drive performance while equipping frontline teams with better tools to compete for profitable growth.
Directors take a more diversified approach. Half prioritize Distribution and agent tools, while the remaining budget growth is split between Claims automation and Data & Analytics. These choices point to near-term operational wins: faster claims handling, reduced leakage, and improved service levels.
Owners Go All-In on Analytics
For owners, the signal is unmistakable: 100% identify Data & Analytics as the top area for budget growth. For this group, analytics is the foundation for better decision-making across underwriting, claims, and capital allocation—especially critical in smaller or more concentrated portfolios.
The Bigger Picture
The takeaway is clear: while budget priorities vary by role, data is the connective tissue across every major investment theme. Underwriting technology is rising rapidly at the strategic level, distribution tools remain essential for growth, and claims automation continues to offer targeted efficiency gains.
For insurers planning 2026 budgets, the winners will be those that treat these investments as part of a unified operating model—rather than isolated technology projects.
III. Cost Pressure Is Fragmenting Across the Insurance Org Chart
As insurers head into 2026, cost containment is no longer a single-line item—it’s a leadership-wide balancing act shaped by volatility, margin pressure, and long-term investment tradeoffs. Results from one of our Insurance 150 proprietary microsurvey (N=192) show that while loss costs and reinsurance remain structural concerns, technology spend and talent costs are increasingly defining how different leaders experience pressure.
Across all respondents, cost pressure is relatively balanced: Reinsurance (28%) leads narrowly, followed by Technology spend (26%), Talent/compensation (23%), and Loss costs (22%). But that aggregate view masks meaningful divergence by seniority.
At the C-suite level, concern is highly concentrated. Half of executives (50%) cite reinsurance as their primary cost pressure heading into 2026—far outpacing any other category. This reflects mounting unease around capacity constraints, pricing volatility, and capital efficiency, particularly in catastrophe-exposed and specialty lines. For top leadership, reinsurer economics remain the most immediate lever on earnings stability.
By contrast, Directors are signaling a different priority. Technology spend dominates at 40%, nearly double any other cost category. This points to growing scrutiny around core system modernization, AI deployment, and vendor consolidation, as operational leaders are increasingly tasked with justifying ROI on digital investments made over the last cycle.
Meanwhile, VPs and Partners show a more evenly distributed cost profile. Among VPs, reinsurance (28%) and loss costs (25%) edge out other pressures, suggesting a focus on portfolio performance and underwriting discipline. Partners, often closer to execution and delivery, highlight technology spend (28%) and talent costs (26%)—underscoring the operational friction of scaling platforms while retaining specialized expertise.
The “Other” leadership group—often spanning functional and regional heads—leans hardest into reinsurance (33%), reinforcing how widely risk transfer economics are felt beyond the executive suite.
The takeaway: insurers are entering 2026 with shared constraints but fragmented pain points. While senior executives remain fixated on risk transfer and capital exposure, operational leaders are grappling with the cost of transformation itself—from systems to skills. For insurers looking to rebalance expense ratios without stalling growth, alignment across these perspectives may be just as critical as any single cost-cutting initiative.
IV. Insurers’ Growing Reliance on Private Credit Is Reshaping Capital Constraints
As insurers navigate margin pressure, reinsurance volatility, and persistent yield challenges, capital allocation decisions are increasingly shaped not just by operating performance—but by the structure of the investment portfolio itself. One of the most important shifts underway is the growing role of private credit within insurers’ asset allocations, particularly among life insurers.
In November 2025, the International Association of Insurance Supervisors (IAIS) highlighted this trend in its final Issues Paper on structural shifts in the life insurance sector, noting insurers’ rising exposure to alternative assets, including private credit. While definitions vary, private credit has expanded rapidly over the past decade. As of 2023, global private credit assets—including undeployed capital—reached approximately $2.1 trillion, driven primarily by growth in North America and Europe. IMF analysis suggests that in North America alone, private credit now represents roughly 7% of credit to non-financial corporations, comparable in scale to leveraged loans and high-yield bonds.
Growth has been rapid. Between 2018 and 2023, private credit expanded at annual rates of roughly 20% in North America and 17% in Europe, with Asia seeing particularly strong growth in high-yield and distressed segments. While aggregate exposure remains modest—IAIS estimates suggest that in most jurisdictions private credit represents less than 5% of total insurance sector assets—supervisors consistently report that allocations are likely to increase in the coming years.
What Counts as Private Credit—and Why Definitions Matter
Private credit is difficult to measure precisely due to inconsistent definitions and reporting standards across jurisdictions. At a high level, it can be understood as non-bank, non-public lending, spanning a wide range of instruments—from direct middle-market loans to structured asset-based finance and infrastructure debt.
To anchor this discussion, Table 1 outlines examples of private credit categories commonly referenced in supervisory and market analyses.
The lack of standardized definitions complicates both supervisory oversight and internal risk assessment. In practice, private credit exposures often overlap with traditional lending categories, such as corporate loans or mortgage portfolios, particularly where insurers invest through private placements or structured securitisations. This opacity is amplified by the bespoke nature of many private credit instruments, limited secondary market liquidity, and varying levels of disclosure—even among regulated insurers.
Why Private Credit Appeals to Insurers
Despite these challenges, private credit has become increasingly attractive to insurers for several reasons. For life insurers in particular, private credit can improve asset-liability matching, offering long-duration cash flows aligned with long-dated liabilities. Many private credit instruments also provide access to illiquidity risk premiums, enhancing yield in an environment where public fixed-income returns remain constrained.
Additional benefits include portfolio diversification, exposure to a broader set of issuers and sectors, and the ability to negotiate lender-friendly protections such as covenants, security packages, and call protection. Certain segments—such as infrastructure debt—also align insurers’ balance sheets with long-term real-economy investment, reinforcing the strategic appeal of the asset class.
The Tradeoff: Yield Versus Complexity and Risk
These benefits come with material risks. Credit risk is the primary concern, particularly in an environment of elevated interest rates, geopolitical uncertainty, and slowing economic growth. The use of features such as payment-in-kind (PIK) interest can obscure deteriorating credit quality and delay recognition of stress, increasing the likelihood of sharper losses later in the cycle.
Liquidity risk, while often assessed as low to medium at the portfolio level, remains a structural feature of private credit, given the limited availability of active secondary markets. Valuation uncertainty, hidden leverage, and complex multi-layered structures—especially in securitised or fund-based exposures—further complicate risk management and transparency.
Supervisors have responded by increasing scrutiny through enhanced reporting requirements, stress testing, and capital considerations. In parallel, insurers are strengthening internal credit models, diversifying exposures, and integrating private credit more explicitly into their enterprise risk and liquidity frameworks.
Why This Matters for 2026 Planning Cycles
The growing role of private credit has implications beyond the investment portfolio. As insurers take on greater balance-sheet complexity and illiquidity, tolerance for execution risk elsewhere in the organization narrows. Capital tied up in opaque or long-dated assets raises the premium on initiatives that deliver fast, defensible operating returns.
This helps explain why, even as underwriting modernization and advanced analytics are viewed as strategically critical, insurers remain disciplined—and sometimes cautious—about funding large-scale transformation efforts. In an environment where balance-sheet risk is rising, ROI certainty becomes not just an operational preference, but a capital management imperative.
V. Where Leaders Expect the Fastest ROI From New Investments
In today’s insurance environment, ROI isn’t just about returns—it’s about speed, certainty, and defensibility. With loss ratios under pressure, claims costs rising, and regulatory scrutiny intensifying, insurance leaders are no longer asking whether to invest in technology. They’re asking where capital works fastest.
The data tells a clear story: near-term ROI is expected from operational technologies that touch money and customers first.
Across all respondents, Fraud Detection (27%) and Customer Experience (26%) lead as the areas most likely to deliver fast returns. These are not experimental bets. Fraud tools directly protect margin by reducing leakage, while customer experience investments show impact through faster claims resolution, higher retention, and lower servicing costs. In a sector where outcomes are closely tracked, both categories offer clean attribution between investment and result.
But the more revealing insight emerges when we look at how expectations shift by seniority.
Different Seats, Different ROI Math
Partners stand out with the strongest conviction in Fraud Detection and AI-enabled Underwriting (both at 34%). This group often operates closest to portfolio performance and long-term profitability, making them acutely sensitive to loss prevention and risk selection. Their confidence in underwriting AI suggests belief in its upside—but also comfort with longer implementation cycles and model maturity.
At the C-suite level, priorities shift. Customer Experience leads at 31%, followed closely by Claims Automation (27%). This reflects a strategic reality: senior executives are under pressure to show visible progress to boards, regulators, and customers alike. Faster claims, fewer complaints, and smoother digital journeys deliver reputational ROI alongside financial impact—and often within reporting cycles that matter most.
VPs and Directors sit in the middle, favoring Claims Automation (29% and 27%) as a proven, execution-ready lever. For these leaders, success is measured in throughput, cycle times, and operational efficiency. Claims automation offers tangible gains without the organizational disruption that often accompanies underwriting transformation.
Why Fraud and Claims Keep Winning the ROI Race
What’s striking is how consistently Fraud Detection and Claims Automation perform across roles. These areas share three characteristics insurers increasingly prioritize:
Immediate cost visibility – savings are measurable and defensible
Lower regulatory friction – compared to core pricing or underwriting changes
Operational readiness – data, workflows, and use cases already exist
By contrast, AI-enabled underwriting, while viewed as high-upside, appears more polarized. It commands strong confidence among Partners and “Other” roles (40%), yet lower expectations among the C-suite. This gap likely reflects the reality of underwriting modernization: powerful in theory, complex in practice, and often slower to scale.
The Bigger Signal: Pragmatic AI Is Winning
Taken together, the data highlights a broader shift in insurance technology strategy. Leaders are prioritizing pragmatic AI—tools that reduce leakage, accelerate decisions, and improve customer outcomes—before fully rearchitecting core risk models.
This isn’t a retreat from innovation. It’s sequencing.
Insurers are building ROI momentum where it’s fastest and most defensible, creating the financial and organizational room to tackle more transformative bets later.
In today’s market, the fastest ROI doesn’t come from the boldest idea—it comes from the clearest line between investment and impact.
VI. Conclusion: Discipline, Not Retrenchment, Will Define 2026 Winners
As insurers enter 2026, the defining challenge is no longer whether to transform—but how to do so without losing control of margin, capital, or credibility along the way. The findings in this report point to an industry that remains committed to modernization, yet far more deliberate about how transformation is funded, sequenced, and measured.
Across roles, leaders agree on the strategic destination: stronger analytics, more automated underwriting and claims, and technology-enabled growth. Where they diverge is in timing, tolerance for execution risk, and expectations for near-term return. Executives, facing reinsurance volatility and balance-sheet constraints, prioritize initiatives that deliver visible, defensible outcomes. Operational leaders, tasked with delivering those outcomes, focus on technologies that are proven, auditable, and ready to scale. The result is not paralysis—but selectivity.
This selectivity is reinforced by forces beyond the operating model. As insurers increase exposure to private credit and other illiquid assets in search of yield and duration, balance sheets become more complex and less forgiving. Capital tied up in opaque or long-dated investments raises the premium on certainty elsewhere in the organization. In this context, fast, attributable ROI from fraud detection, claims automation, and customer experience is not just attractive—it is necessary.
The data shows that pragmatic AI is winning. Tools that reduce leakage, accelerate decisions, and improve customer outcomes are being funded ahead of more ambitious, but harder-to-scale, underwriting transformations. This is not a rejection of innovation. It is a recognition that momentum matters. Insurers are building financial and organizational headroom where returns are clearest, creating the conditions required to take on larger bets later.
The risk heading into 2026 is not underinvestment—it is misalignment. When strategic ambition outpaces operational readiness, or when cost pressure is felt unevenly across the organization, even well-funded initiatives stall. The insurers best positioned for the year ahead will be those that align capital allocation, technology strategy, and execution incentives around a shared definition of success.
In a market defined by tighter margins, higher volatility, and greater scrutiny, winning will not come from the boldest transformation roadmap. It will come from clear sequencing, disciplined capital deployment, and an unbroken line between investment and impact.
Sources & References
Cost Pressure Is Fragmenting Across the Insurance Org Chart – Insurance150
Global Insurance Market Report (GIMAR)
Where Insurance Budgets Are Growing Fastest in 2026 – Insurance150
Where Leaders Expect the Fastest ROI From New Investments – Insurance150
