2025/2026: REVIEWS & OUTLOOK
2025 Reflections & 2026 Outlook for Insurance | Insurance Thought Leadership
Insurers are entering 2026 with one clear mandate: Strengthen the core to unlock scalable, AI-enabled growth.
For insurers, 2025 marked a reset in core systems strategy. After a decade spent patching legacy and modern-legacy platforms, layering point solutions, and stitching together data across disconnected architectures, insurers are now shifting toward rebuilding the core operational backbone required for resilience, agility, and sustainable growth. This is not a cosmetic upgrade; it's a structural re-architecture. The industry signal is now evident: competitive advantage will hinge on the agility, intelligence, and adaptability of an insurer's core platform.
This shift reflects a clear market reality: after years of incremental fixes and deferred modernization, insurers are being forced back to fundamentals. Achieving long-term, risk-adjusted profitability in a volatile environment while meeting rising customer expectations now depends on strengthening the foundations — systems, data, and operating structures — before meaningful innovation can take hold.
Insurers are entering 2026 with one clear mandate: Strengthen the core to unlock scalable, AI-enabled growth. GenAI and agentic AI have transformed expectations across underwriting, claims, and service, but legacy architectures cannot support the data fluidity, governance, and orchestration required. Modernization is no longer a technology upgrade; it is a business model reset.
Sara Perez is executive vice president at EIS
News
Federal ADAS Bill Would Establish Calibration Standards Collision Shops Have Been Seeking - Autobody News
Bipartisan legislation directs NHTSA to create modification tolerances and test procedures ahead of 2029 AEB mandate.
A bipartisan bill introduced in the U.S. House of Representatives would require federal regulators to establish standardized guidelines for ADAS calibration, directly addressing a gap that has left collision repair shops and calibration centers uncertain about how to handle vehicles with aftermarket modifications.
The ADAS Functionality & Integrity Act (H.B. 6688), introduced Dec. 15 by Rep. Diana Harshbarger (R-Tenn.) and co-sponsored by Rep. Gabe Vasquez (D-N.M.), Rep. Jay Obernolte (R-Calif.), and Rep. Norma Torres (D-Calif.), would direct the National Highway Traffic Safety Administration to create modification ranges, tolerances, and test procedures for new vehicles starting with model year 2028.
"The introduction of the ADAS Functionality & Integrity Act is a landmark moment for anyone who owns, repairs, or modifies a vehicle," said Jim Moore, SEMA vice president of OEM and product development. "Currently, the industry lacks clear standards governing ADAS calibration, and aftermarket businesses and vehicle owners need access to the necessary calibration information and procedures needed to keep modern safety features functioning."
Commentary/Opinion
Insurance’s biggest digital roadblock
“Technology is rarely the biggest roadblock - culture is,” said Mark Bennett (pictured), chief growth officer at ACORD Solutions Group. While technical debt and aging systems still complicate digital transformation in insurance, he believes it's internal resistance that continues to be the real drag on progress.
Insurers have operated on the same proprietary systems for decades - some 20 or 30 years old. For firms on dated platforms, modernizing often exposes deep integration gaps. “There’s an interoperability problem… some people can easily integrate, some people can’t,” Bennett said. Systems like Guidewire and Duck Creek offer flexibility, but many carriers remain locked into older architectures.
Yet the core issue, Bennett argued, is not the software - it’s the mindset. “The biggest factor among all is cultural change,” he said. Take ACORD forms, a staple in the property and casualty market. Agents and brokers are used to manually re-keying data into multiple systems. Introducing automation that bypasses this process doesn’t just mean new software - it means upending workflows that staff have relied on for years. “That’s a change of workflow and a change of the way of working inside that business, and that… is a real challenge,” he said.
Supply chain snags spike total auto loss claims
Supply chain snags spike total auto loss claims. The automotive past offered predictability. The rising frequency of total loss claims is a key driver behind increasing auto insurance premiums, a trend analyzed closely by resources such as Cheap Insurance.
The automotive past offered predictability. A typical fender bender meant a repair, a short rental, and a completed claim with the car insurance provider. Today, that same minor collision is increasingly likely to result in a "total loss" designation from the insurer. Even seemingly fixable damage leads to vehicles being written off at an alarming rate.
This change is not due only to visible damage; it is the result of the "Total Loss Tsunami," driven by persistent global supply chain disruptions and soaring parts costs. This situation represents a significant financial hit for vehicle owners and a fundamental shift for the entire auto insurance industry. The rising frequency of total loss claims is a key driver behind increasing auto insurance premiums, a trend analyzed closely by resources such as Cheap Insurance.
The Perfect Storm: When "Fixable" Becomes "Unfeasible"
The decision for a car insurance company to declare a vehicle a total loss boils down to a cold, hard calculation: Is the cost of repairing the vehicle more than a certain percentage of its Actual Cash Value (ACV)? This total loss threshold is set by state law or by the insurer, but typically hovers around 70% to 80% of the ACV. If repair costs hit that mark, the vehicle is totaled.
Research
Triple-I: Homeowners Insurance Market Shows Early Signs of Stabilization
Triple-I: Homeowners Insurance Market Shows Early Signs of Stabilization as Post-COVID Inflation Pressures Level-Set Into ‘New Normal’ For Risk Pricing
As rising premiums and tightening coverage options continue to strain household budgets, millions of U.S. homeowners are grappling with the growing challenge of affording and maintaining adequate insurance protection. The Insurance Information Institute’s (Triple-I’s) latest Issues Brief finds that, despite these pressures, the homeowners insurance market is beginning to show early signs of stabilization.
The U.S. homeowners segment is projected to post double-digit net written premium growth in 2025, with a return to overall profitability expected in 2026, a development that could help, over time, improve market resilience and support more stable pricing for consumers.
Trends and Insights: Homeowners Insurance explains how inflation, elevated replacement costs and persistent climate-related losses continue to shape premiums and policyholder options. For example, although the Los Angeles wildfires contributed to the worst Q1 homeowners underwriting performance since 2011, Q2 2025 delivered a notable improvement, with the direct incurred loss ratio at 58.9%, the strongest second-quarter result in more than 15 years. While these indicators reflect progress, many homeowners are still feeling the strain of higher insurance costs.
By the Numbers
- 2025 net combined ratio forecast: 107.2, a 7.5-point improvement from 2024, though still elevated.
- Net written premium growth: 11.8% in 2025, slightly below 2024 and 2023 but reflective of continued inflation and loss trends.
- Q2 2025 home direct incurred loss ratio: 58%, a 22-point improvement from Q2 2024.
- Share of P/C premiums: Homeowners insurance accounted for 15.6% of all U.S. property/casualty premiums in 2024, influencing overall sector performance.
- Economic premium drivers: Up from -0.8% year-over-year in 2024 to 0.8% in 2025.
- Interest rate outlook: Expected rate cuts may take 12 months to impact mortgage rates and could help fuel housing starts by 2026–2027.
AI in Insurance
Generative AI in Insurance Claims Faces a Scale Problem
Most P&C insurers are using AI, but few are deploying it where it matters most, according to Bain & Co.
While 78% of property and casualty insurers have adopted generative AI, only 4% have scaled it meaningfully across their claims operations, according to a new Bain & Company survey of 160 global insurers—revealing a significant gap between experimental adoption and transformative implementation.
Generative AI deployment in P&C claims remains largely experimental, Bain found. Most insurers are using the technology to handle specific tasks such as fraud detection, document summarization, and customer communication. However, this piecemeal approach falls short of what’s possible when AI is embedded throughout the entire claims process, the report said.
Insurers taking an end-to-end approach experience dramatically different results. Those redesigning their full claims operations around AI capabilities have achieved a 35% productivity boost, reduced settlement cycles, and cut homeowners’ claims processing times in half, according to Bain.
Despite these compelling benefits, only 27% of insurers are pursuing comprehensive claims transformation, Bain said.
Zywave Introduces Agentic AI Strategy & Suite of Agents
Zywave, a leading provider of insurance technology solutions, today unveiled its Agentic AI strategy and the industry’s first suite of insurance-specialized AI agents. The agents will help insurance companies transform how they work and achieve unprecedented levels of revenue growth and productivity.
- Prospect Identification Agent: After seamlessly connecting to your Management System, the agent enriches your existing customer and policy data with missing details (e.g., websites, NAICS/SIC codes, company size, revenue) and recommends the best new prospects for each producer to define your Ideal Customer Profiles.
- Lead Sourcing & Scoring Agent: Uses the Ideal Customer Profile to find top prospects – with trusted contact information, such as email and phone numbers – from the miEdge database, ranked by buying intent indicators like upcoming renewals or recent broker changes.
- Research & Enrichment Agent: Gathers prospective household and company data, identifies current coverages, personalizes custom messages using real-time news, and share insights about both household and company prospects.
- Outreach & Optimization Agent: Builds personalized email outreach for each prospect, delivers pre-built campaign sequence drawing from Zywave’s extensive content library, then tracks engagement metrics, and recommends optimizations to boost results.
InsurTech/M&A/Finance💰/Collaboration
Insurance Industry ‘Megadeals’ Dominate 2025, Says PwC
“Megadeals” are ruling insurance industry mergers and acquisitions as action remained consistent throughout 2025, with the prospect that the need for growth with drive more deals in 2026.
According to a new report from PwC, 93% of deal value during the second half of 2025 was drive by what it calls “megadeals.”
The insurance sector reported 207 transactions from June 1 to Nov. 30, 2025 with $31.8 billion in deal value. The previous six months has 209 disclosed deals worth $30 billion, PwC said in its 2026 US Insurance Deals Outlook. READ ON
Insurance M&A activity set to hold pace in 2026: PwC
PwC has disclosed that the insurance sector recorded $31.8 billion in M&A deals across 207 transactions between June 1 and November 30, and expects deal activity in 2026 to be broadly in line with this year.
According to the firm, deal flow has remained steady over the past 12 months, as strong buyer appetite, driven by consistent inorganic growth strategies, has been met by a steady stream of sellers entering the market.
Notably, in the past six months alone, seven insurance megadeals exceeding $1 billion have been announced.
The $31.8 billion figure across 207 transactions for the period compares to $30 billion and 209 disclosed deals for the prior six months.
Looking ahead to H1 2026, PwC has suggested that carriers are likely to continue focusing on capital optimisation and portfolio reshaping through M&A transactions.
The firm explained that P&C M&A activity is picking up, as many carriers have reported improved loss ratios and record underwriting profitability, making the sector more attractive to investors and strategic buyers.
At the same time, there is reportedly pressure on P&C premium rates, which may lead to additional deal activity as carriers seek to maintain top-line growth through acquisitions.
Nirvana Raises $100 Million Series D to Further Redefine Trillion-Dollar Industry
Nirvana Insurance, the premier AI-native commercial insurer, today announced it has secured a preemptive $100 million of its Series D led by Valor Equity Partners((, with previous lead investors Lightspeed Venture Partners and General Catalyst** also doubling down significantly. These top firms reconfirm their conviction in Nirvana following closely on the company's Q1 2025 Series C. In that short time, Nirvana has nearly doubled its valuation, bringing it to a valuation of $1.5 billion. The new capital will accelerate Nirvana's mission to both build the world's first AI-powered operating system for insurance and to expand the company's unique solution at the intersection of telematics and insurance beyond current product sets.
"The promise of AI is not incremental; it gives us an opportunity to rethink industries entirely, from first principles and to create the best solutions for the challenges of today and tomorrow," said Nirvana CEO Rushil Goel. "At Nirvana, we're building insurance the way it needs to exist in the AI era: with data at the center, models trained on billions of real-world miles, and an OS that can redefine underwriting, claims, and services for the industry at scale."
The impact is transformational, not incremental:
- Up to 20% upfront safety discounts for customers
- Dramatically faster underwriting and underwriter efficiency
- Top decile loss ratios
- Industry leading claims satisfaction and claims resolution speed
Vantage to be acquired for $2.1 billion
Howard Hughes Holdings will buy privately held specialty insurance firm Vantage Group Holdings for about $2.1 billion, the companies said on Thursday.
The real estate company will fund the deal with cash and up to a $1 billion loan from Bill Ackman-backed hedge fund, Pershing Square, which would be in the form of preferred shares in Vantage.
Howard Hughes said it could buy the stock back from Pershing Square over seven years at a premium tied to Vantage’s book value.
Howard Hughes is best known for its master-planned communities in places including Texas, Hawaii and Nevada.
Although the real estate firm has since shifted its focus towards buying controlling stakes in smaller businesses, the strategy is part of Ackman’s broader effort to build a diversified holding company modeled after Berkshire Hathaway.
Bermuda-based Vantage Group uses technology and data analytics to underwrite and provide commercial property and casualty insurance products through its subsidiaries.
The deal for the company backed by Carlyle and Hellman & Friedman is expected to close in the second quarter of 2026.
Announcements
Enlyte to Acquire PartsTrader, Complementing Mitchell's Auto Physical Damage Technology Solutions
Enlyte, a leader in technology, networks and services for the property and casualty industry, announced today it has entered into an agreement to acquire PartsTrader, the industry's leading parts procurement marketplace.
The acquisition represents a strategic investment that brings together two complementary businesses within the Auto Physical Damage ecosystem. PartsTrader will become a wholly owned subsidiary of Enlyte and will continue to operate as an independent entity alongside Mitchell's Auto Physical Damage division. Both organizations will maintain their distinct identities and operations while benefiting from the collective strength of the Enlyte portfolio. Both Mitchell and PartsTrader will continue as open platforms – allowing the choice of other information providers, as well as suppliers and other partners within the ecosystem.
"This acquisition reinforces Enlyte's commitment to the Auto Physical Damage industry and our focus on delivering comprehensive technology solutions that improve outcomes across the collision claims and repair sectors," saidAlex Sun, CEO of Enlyte. "By bringing together Mitchell's premier damage appraisal solution with PartsTrader's leadership in parts procurement, we're positioned to deliver even greater value to our insurer and repair customers and the market. We're excited about the natural synergies between our companies and look forward to the opportunities ahead."
"Joining the Enlyte family represents an exciting new chapter for PartsTrader," said Steve Messenger, CEO of PartsTrader. "As part of Enlyte, we'll have additional resources to accelerate our growth while continuing to serve our customers with the same commitment to excellence they've come to expect. Our companies share a vision for innovation and customer success, and I'm confident this partnership will create significant value for the auto physical damage claims and repair industry."