Commentary/Opinion
HUB INTERNATIONAL 2026 NORTH AMERICAN REPORT: ONE-THIRD OF ORGANIZATIONS LACK MATURE RISK STRATEGY
Hub International Limited (HUB), a leading global insurance brokerage and financial services firm, released the HUB International 2026 North American Report which found that one-third of North American companies are operating without a mature, organization-wide risk management strategy, leaving leaders exposed to rising threats.
Drawing on proprietary research across 10 industries, the new report brings risk into sharp focus by highlighting the most urgent challenges impacting organizational profitability and resilience.
In this year's report, HUB introduces the Risk Management Maturity Model, a framework designed to assist organizations with evaluating their current level of maturity and identifying steps to enhance risk management strategies.
As the new year approaches, the HUB International 2026 Profitability & Resiliency Executive Survey reveals a widening gap between risk awareness and action, with many organizations working to adapt to today's complex environment. Leaders cite rising costs, cybersecurity, and regulatory pressure as top threats, yet many are not evolving their strategies quickly enough to keep pace.
"Most organizations know about the cracks in their foundation, but awareness alone doesn't translate into readiness," said Marc Cohen, Chairman and Chief Executive Officer of HUB. "In today's environment, organizational maturity in navigating uncertainty should be a key leadership metric. Advancing along this risk maturity curve and deepening insight into managing exposures with decisive actions is now central to business strategy."
Global trade fragmentation set to affect insurance costs and coverage, report finds
The US effective tariff rate of 15% could reduce global property and casualty (P&C) premium growth by 0.7 percentage points and life premium growth by 1.2 percentage points between 2025 and 2027, compared with 2024 levels, an analysis shows.
Brokerslink's report, produced by the Swiss Re Institute, highlights the insurance implications of rising trade tensions and geoeconomic fragmentation.
Claims impact in the US
Tariffs are expected to raise import prices for non-exempt goods, including commodities and intermediate goods, which feed into local supply chains. Higher inflation will increase claims severity as insured assets become more expensive to repair or replace.
Swiss Re Institute forecast a 2.4-percentage-point rise in P&C claim payouts in the US between 2025 and 2027. Property claims are projected to rise by roughly 8.9% and motor physical/own-damage claims by over seven percentage points due to higher vehicle and spare part costs. Lines covering services (D&O, C&S) and income compensation (motor/general liability) are likely less affected, while the impact on health insurance remains uncertain, though skewed toward adverse outcomes.
José Manuel Fonseca (pictured), Brokerslink president and CEO
Can We Please Tone Down All the 'Inflection Point' Talk? | Insurance Thought Leadership
I believe in creating a sense of urgency as much as the next guy, but it's just not right to say every part of the insurance industry is forever at a crossroads.
With all the copy I read through every week as I decide which pieces to publish here at ITL, I'm noticing an odd trend.
For the past couple of years, tons of the articles submitted to me gloried in the insurance industry's "transformation" and "disruption." In recent months, though, lots warn that insurance is at a "crossroads" or an "inflection point" — often dressed up with ominous adjectives so the situation becomes a "major" crossroads or a "crucial" inflection point.
Why the doom and gloom? And is it justified?
I even accept that some parts of the industry are at inflection points. For instance, I recently published a piece by Stephen Applebaum and Alan Demers, "Embedded Insurance Nears Tipping Point" — because they're right; embedded insurance has been percolating as a possibility for years now and may be about to have its breakout moment, especially in auto insurance.
Paul Carroll, editor-in-chief, Insurance Thought Leadership
AI in Insurance
Insurance Customers Welcome AI—With Reservations About Who Really Benefits
While insurance customers demonstrate willingness to embrace artificial intelligence, nearly seven in 10 believe their insurers stand to gain far more from the technology than they do, according to a J.D. Power report that reveals a critical gap between consumer acceptance and consumer trust.
Artificial intelligence has become increasingly woven into the consumer experience, and insurance customers are no exception.
Yet this apparent openness masks a significant concern: only 26% of customers believe the benefits will be shared equally between insurers and policyholders. The survey data suggests that as AI deployment accelerates throughout the insurance industry, consumers remain convinced that tech investments serve corporate interests rather than customer interests.
Drawing Lines on Convenience and Trust
Consumer comfort with AI divides sharply based on the nature of the task, J.D. Power found. Customers embrace AI for automating routine interactions: claims status updates, billing management, and basic customer service inquiries rank among the most acceptable uses. These applications offer transparent benefits for the customer experience, the report noted.
The comfort level evaporates when AI moves into consequential decisions. Nearly half of customers surveyed express discomfort with AI processing their claims. CONTINUES
2025/2026: REVIEWS & PREDICTIONS
2026 insurance outlook: Costs will rise as technology evolves
Several experts weigh in on how different sectors of the industry will respond in 2026 as costs rise and technology continues to evolve.The insurance industry has faced escalating claim costs in recent years, which has pressured rates higher for auto, home, pet, and health coverage.
Several insurance experts weigh in on how different sectors of the industry will respond in 2026 as costs continue to rise and technology evolves.
Auto insurance
According to the Bureau of Labor Statistics, auto insurance premiums rose by more than 64% between September 2020 and September 2025, outpacing the general inflation rate of 25% during that time period, according to the BLS CPI Inflation Calculator.
John Espenschied, owner of Insurance Brokers Group, believes auto insurance rates may actually decline in 2026 — but only for the most qualified drivers. Espenschied cited safer car technology, like lane assist, and high business growth expectations as factors that would push rates lower. Offsetting dynamics include rising repair costs and lingering high inflation.
“Companies will try to attract new business by lowering premiums, but tech repair costs and inflation are here to stay,” Espenschied explained.
Cybersecurity and insurance predictions for 2026 - Resilience
Deepfakes, data suppression, and what keeps CISOs awake
The cyber threat landscape is evolving at breakneck speed, and the challenges organizations will face in 2026 look dramatically different from those of even a year ago.
To understand what’s coming, we gathered insights from Resilience’s leading cybersecurity and cyber insurance experts: Dr. Ann Irvine, Chief Data and Analytics Officer; Chris Wheeler, CISO; David Meese, Director of Security Services; Chuck Norton, Senior Technical Security Advisor; Maria Long, Chief Underwriting Officer; Tom Egglestone, Head of International Claims; and Scott Tenenbaum, Head of North American Claims.
Their predictions paint a clear picture: 2026 will be defined by AI-amplified threats that exploit human vulnerabilities; a fundamental shift in ransomware tactics; the blurring line between private enterprise and national security; evolving insurance coverage landscapes; and the critical importance of resilience over prevention. Here’s what organizations need to know—and do—to prepare.
News
SettleIndex joins Guidewire’s InsurTech Vanguards programme
SettleIndex, a UK-based automated settlement-prediction platform, has joined Guidewire’s InsurTech Vanguards programme, a scheme designed to spotlight emerging firms reshaping the property and casualty (P&C) insurance sector.
The initiative, run the California-based cloud software provider, aims to help insurers understand how new InsurTech offerings can be deployed to improve efficiency, accuracy and customer outcomes across the claims process.
SettleIndex, which develops data-driven tools to support insurers in navigating complex, high-value disputes, said the partnership would help broaden awareness of its technology among global carriers.
The firm’s platform uses scientific modelling to estimate potential settlement values at the outset of a claim, enabling insurers to reserve more accurately and reach decisions more quickly.
Robert Hogarth, founder and CEO of SettleIndex, said: “We are delighted to join the Guidewire Insurtech Vanguards community. Slow and incorrect claims appraisal can add hugely to the time and cost of resolving claims. SettleIndex uses correct scientific principles to identify probable settlement values with a high degree of accuracy at the outset of the claims journey. This enables better reserving and settlement decisions. Joining this program will allow us to showcase the measurable value our technology can bring when used consistently across a book of business.”
Guidewire’s InsurTech Vanguards programme brings together a curated group of start-ups offering innovative solutions for P&C insurers. Participants receive strategic guidance and visibility within Guidewire’s large customer base, which spans more than 500 insurers worldwide.
Laura Drabik, chief evangelist at Guidewire, said: “We are excited to welcome SettleIndex to the Insurtech Vanguards program. By fully automating the process of predicting settlement values SettleIndex enables insurers to better evaluate complex disputes, improve claims outcomes, and reduce uncertainty across their portfolios.”
Research
S&P Global shares how EVs could be shaped by changing economic trends
S&P Global Mobility reports that economic trends are pushing automakers to rethink their electric vehicle supply chains and certain aspects of vehicle design.
“Amid shifting global trade dynamics, automakers are being forced to rethink supply chains for critical electric vehicle (EV) components,” S&P’s article states. “EV motors — long dependent on rare earth elements (REEs) — are now a strategic pressure point. Recent export restrictions from mainland China, which currently dominates the mining and refining of rare earth elements, combined with geopolitical uncertainty, have transformed automakers’ dependence on REEs into a significant strategic vulnerability.”
In response, S&P has found automakers are either reducing or eliminating the use of REEs in their EV motors.
“Cultivating robust supply chains for these alternatives will require close collaboration across Tier-1 and Tier-2 suppliers, as well as substantial in-house investment in advanced manufacturing capabilities,” the article states.
InsurTech/M&A/Finance💰/Collaboration
Baldwin, CAC to combine in transformational $1-billion deal
The combination will surpass $2B in revenue with deepened specialty and middle-market strengths
The Baldwin Group has agreed to merge with CAC Group in a landmark transaction that will combine two fast-growing US brokerages into what is expected to become the largest majority colleague-owned, publicly traded insurance broker in the country.
In an announcement, Baldwin revealed that the transaction includes $1.026 billion in upfront consideration, split between $438 million in cash and 23.2 million Baldwin common shares valued at $589 million.
The deal also features up to $250 million in performance-based earnouts and a $70 million deferred payment, further expanding the potential value of the merger. The companies expect the deal to close in the first quarter of 2026, subject to regulatory approvals.
Embedded Insurance
Why adequacy is the future of embedded insurance | Blog post
Discover why embedded insurance adequacy – not just access – is key to closing the protection gap and building trust through smarter products.
Embedded insurance is no longer a niche experiment, but a fast-growing global market. Projected to surge from around $70 billion today to more than $700 billion by 2030, it’s on track to represent nearly a quarter of the personal lines market.
The driver of this growth is simple: seamless insurance offers integrated directly at the point of sale. Customers get relevant protection in the moment, without friction.
But scale alone isn’t enough. The next big challenge for the industry is embedded insurance adequacy: making sure products don’t just provide access, but actually give customers the protection they need.
As our Head of Partnerships Jonas von Oldenskiöld put it during our recent webinar with The Open and Embedded Insurance Observatory: ‘We’ve been so focused on access that we’ve ignored adequacy. Underinsurance is just as damaging as having no insurance at all.’
This shift raises a critical question for insurers, brokers and brands alike: how do we design embedded products that are not just available, but relevant and valuable?
Financial Results
Guidewire raises fiscal 2026 ARR guidance to $1.230B as cloud, AI, and new product adoption accelerate - Seeking Alpha
Earnings Call Insights: Guidewire Software, Inc. (GWRE) Q1 2026
Management View
- CEO Mike Rosenbaum reported "delivering results ahead of expectations across all key financial metrics" and highlighted accelerating adoption of Guidewire's cloud products and services. Rosenbaum stated, "ARR grew 22% year-over-year and 21% on a constant currency basis." He emphasized the successful launch of the Niseko release and cited eight new cloud deals in Q1, with significant wins including The Hartford and Sompo in North America and a major mutual insurer in the U.K.
- Rosenbaum described a strategic shift: "We are extremely excited about the opportunity unlocks for us in new products, innovation and generative AI, and these new product areas are very much where we are focused now." The CEO spotlighted the launch of PricingCenter and UnderwritingCenter, new applications targeting pricing and underwriting, built on Guidewire's unified cloud foundation and featuring generative AI integration.
- Integration of the recently acquired ProNavigator, an AI-powered knowledge management platform, was presented as a step in generative AI deployment, with Rosenbaum noting, "By integrating ProNavigator into Guidewire applications, we can now deliver instant context-aware guidance and answers to the people using our applications."
- CFO Jeffrey Cooper stated, "Q1 saw record sales activity for a first quarter and a clean beat across ARR, revenue and profitability expectations." Cooper added, "ARR ended at $1.063 billion, up 21% year-over-year on a constant currency basis and ahead of our expectations. Total revenue was $333 million, up 27% year-over-year, reflecting strong performance across all segments."
Outlook
- Cooper raised fiscal 2026 guidance, stating, "We are raising our annual outlook for ARR to be between $1.220 billion to $1.230 billion. For total revenue, we now expect between $1.403 billion and $1.419 billion." Subscription revenue is expected at approximately $891 million, and services revenue at approximately $245 million.
- The company expects the ProNavigator acquisition to add about $4 million of ARR and $2 million in revenue.
Cooper noted, "We are increasing our expectations for subscription and support gross margin to be between 72% and 73% for the year."
For Q2, Guidewire forecasts ARR between $1.107 billion and $1.113 billion and total revenue between $339 million and $345 million.
Financial Results
- Subscription and support revenue rose 31% to $222 million. License revenue increased 12% to $42 million, with Cooper explaining, "licensing benefited from a large annual term license renewal after the end of a multiyear commitment entered into in 2020."
- Professional services revenue was $68 million. Gross profit reached $219 million with a gross margin of 66%. Subscription and support gross margin was 73%, and professional services margin improved to 23%.
- Operating income was $63 million, up 83% year-over-year. Operating cash flow ended the quarter at negative $67 million, attributed to annual employee bonuses and commission expenses related to Q4 sales. Guidewire held over $1.4 billion in cash, cash equivalents, and investments at quarter-end.
Announcements
ZestyAI's Z-WATER™ Greenlit in Five States as Non-Weather Water Losses Intensify
ZestyAI, the Risk and Decision Intelligence Platform for the insurance industry, today announced that its non-weather water risk model, Z-WATER™, has been reviewed and accepted for use in underwriting and rating in Illinois, Indiana, Iowa, Louisiana, and Wisconsin.
Insurers in these states will now be able to set property-specific rates, align coverage with home-level vulnerabilities, and target inspections and mitigation strategies—including smart water sensors—to reduce cross-subsidization and improve portfolio performance.
Non-weather water has become a major pressure point for carriers. Claim severity has climbed 80% in the past decade, and average losses now exceed $13,000, making it the fourth-costliest peril in homeowners insurance. Routine failures like burst pipes and hidden leaks are now producing catastrophe-scale losses that surpass hurricanes in severity. Yet the peril has been difficult to model using traditional rating tools, which rely on territory-level or age-based proxies that overlook the property-specific factors driving interior water losses.
Using verified insurer loss data, Z-WATER applies computer vision to aerial imagery and incorporates property-level data, permitting history, localized climatology, and infrastructure context to capture the property-specific drivers of interior water losses. By modeling how these variables interact, Z-WATER predicts both the frequency and severity of non-weather water claims with up to 18× greater accuracy than traditional models.
"Non-weather water losses place real pressure on carriers' books, but they're also highly preventable when you understand where the risks actually lie," said Bryan Rehor, Director of Regulatory Strategy at ZestyAI. "Z-WATER helps insurers pinpoint those vulnerabilities at the property level and price them appropriately, while meeting regulators' expectations for clarity and fairness."
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