The insurance industry’s senior risk leaders are charting a course through a landscape increasingly defined by dual pressures. While immediate concerns for 2026 are rooted in macroeconomic and geopolitical uncertainty, the horizon beyond three years is clearly dominated by technological shifts, particularly those driven by Artificial Intelligence. This insight, drawn from the 19th Annual Emerging Risks Survey by the Casualty Actuarial Society (CAS) and the Society of Actuaries (SOA), reflects a fundamental re-evaluation of what constitutes a primary threat.
For the near term, financial volatility stands out as the single most impactful risk, selected by a quarter of C-suite respondents. Geoeconomic and globalization shifts follow closely, underscoring a world where interconnectedness also means amplified instability, impacting everything from trade flows to sovereign credit quality. This aligns with broader industry sentiment, including Swiss Re’s assessment of a structurally “riskier world” characterized by slower global GDP growth and persistent inflation through 2027. For insurance balance sheets, this translates directly into investment portfolios exposed to interest rate and spread volatility, alongside liability books sensitive to inflation, supply chain disruptions, and political instability. The erosion of purchasing power, coupled with the potential for increased frequency and severity of claims due to geopolitical events, creates a challenging environment. Nonlife premium growth, while positive, is expected to decelerate as pricing momentum wanes and new cost pressures build into claims, compressing margins at a time when capital preservation is paramount.
Yet, the more profound shift is occurring on the medium-term radar. Looking three or more years out, 60% of C-suite respondents anticipate technological and economic risks will have the greatest impact. Adverse AI outcomes and greater-than-normal financial volatility are cited as the most impactful individual risks in this longer timeframe. Technology-related threats, encompassing AI misuse and the broader application of disruptive technologies, have consistently ranked among the top three emerging risks in every survey since 2023. This is not merely a technical upgrade; it is a redefinition of insurable interest.
What is emerging is not just new risks, but a new risk architecture.
The regulatory environment is already responding to this technological acceleration. In the US, all 50 states introduced some form of AI-related legislation in the 2025 session. States like California are moving to regulate “high-risk” AI systems used in consequential decisions, treating them as regulated activities. State insurance regulators are also issuing guidance specifically on AI use in pricing, underwriting, and claims, with a strong emphasis on governance, transparency, and nondiscrimination. This creates a profound dual-track risk for carriers: first, the direct potential for adverse outcomes stemming from AI failure, misuse, or unintended consequences, such as algorithmic bias leading to discriminatory practices or system errors causing widespread losses. Second, there is significant regulatory and liability exposure if AI-driven decisions are not explainable, are deemed unfair, or lead to unintended discriminatory impacts. The 'black box' problem, where the decision-making process of complex AI models is opaque, directly challenges traditional actuarial principles of transparency and justification. This necessitates a fundamental re-thinking of how risk is quantified, priced, and ultimately, how claims are managed. Some insurers are already adjusting their coverage, with Verisk introducing optional endorsements to exclude AI-related liabilities from commercial general liability forms, and several US carriers actively seeking approval for similar AI exclusions. The market always finds a way to price in what it fears, eventually.
Beyond these dominant categories, risk combinations are also gaining prominence, with technological pairings being the most commonly selected. Economic and environmental, and economic and technological pairings also feature prominently, highlighting the complex interplay between different risk types and the need for integrated risk management frameworks. Environmental risks, particularly extreme weather events, remain significant for 2026, ranking as the third most impactful specific risk for C-suite respondents. However, there’s a notable shift in how climate risk is perceived. Compared to earlier surveys, it is increasingly treated as an embedded, managed risk rather than a novel threat. This implies that while the physical risks persist and intensify, the industry is moving towards internalizing and quantifying them within existing frameworks. Large carriers now routinely deploy climate scenarios, portfolio steering tools, and updated underwriting guidelines, reflecting a more mature approach to integration. This proactive stance is critical, even as warnings from Swiss Re and others suggest that structurally higher catastrophe losses, driven by both primary and secondary perils, are becoming a “new normal” for P&C profitability, demanding continuous adjustment to capital allocation and reinsurance strategies.
The challenge for insurers is clear: ensure that emerging-risk processes, capital models, and product strategies evolve at a pace that matches the accelerating risk landscape. The shift from immediate geopolitical and economic concerns to longer-term technology-driven risks demands a fundamental re-evaluation of strategic priorities. Waiting for these concerns to manifest directly in loss experience and capital charges would be a costly oversight. The old playbooks will not suffice.
