Looking Ahead at the Key Challenges Facing UK Insurers in 2026

In February, we released The Carrier Perspective: 2025 Claims Insights, the third annual edition of our whitepaper with insights into the challenges and opportunities facing the industry from more than 200 survey respondents across the globe, including insurers, managing general agents (MGAs) and programme administrators. It painted a clear picture of UK insurers' concerns for 2025: premium affordability and insurability was the leading challenge, followed by adapting to rapid technology advancements and changes to regulatory compliance

With our 2026 Claims Insights survey having recently closed, we're looking ahead at the new challenges vying for UK insurers attention and the evolution of ongoing concerns.

Premium affordability and insurability remains a high priority, but talent attraction and retention has emerged as a contender for the most significant challenge that UK insurers are grappling with today.

There also appears to be a notable shift when it comes to concerns about technology. While adapting to rapid advancements is still a key consideration, data and cybersecurity now appears to be a primary concern globally and seems set to rank in the top three challenges for the second year in a row.

This significant movement over the last 12 months demonstrates that insurers must remain agile to stay ahead of the challenges on the horizon as well as proactively address the most pressing demands.

Ahead of the release of The Carrier Perspective: 2026 Claims Insights whitepaper early in 2026, we dive into these key issues and discuss what UK insurers can do to counteract their growing influence.

Talent Attraction and Retention

Talent attraction and retention's escalation from the number seven ranked challenge in 2025 to a top three UK contender for 2026 indicates that insurers may be increasingly looking to talent as a solution to overcome other problems. However, a shortage of new entrants and difficulty maintaining highly skilled staff may prove to be the core challenge itself.

The 2025 Claims Insights survey saw 62% of UK respondents report a moderate impact from the labour market conditions on their organisation's ability to grow and manage claims efficiently, with 76% turning to flexible work arrangements for retention followed by enhanced employee benefits.

With the significant uplift in respondents highlighting talent attraction and retention as the top challenge for 2026, we expect to see organisations employ a wide breadth of tactics to attract new entrants. Ensuring that the expertise of long-serving staff isn't lost is equally important, and meeting the needs of both isn't easy.

Insurers should consider a holistic approach to career development that allows for interdepartmental exploration and experience. The flexibility to design your own career path, wrapped in the security of one organisation, is one that we've seen work well. It's allowed us to cultivate a pool of experienced professionals with transferrable skills as well as new entrants prioritising discovery. One example of this is Anjli Khawani, now a business architect at Gallagher Bassett who started her career with the company straight out of high school and shared her unique career journey earlier this year.

Tapping into established talent pools is a cost-effective, flexible and fast solution to the new urgency to overcome the talent shortage in 2026.

Premium Affordability and Insurability

Despite early data from the 2026 Claims Insights survey indicating that premium affordability and insurability is no longer the top concern for UK insurers, its continued presence in the top three for the second year makes it clear that insures are still feeling the pressure.

The 2025 Claims Insights whitepaper highlighted that increasing premium rates were the primary approach for insurers in the UK looking to manage evolving market dynamics, with 64% citing it over leveraging technology and data analytics or strengthening claims management processes. Rising claims costs and social inflation were two of the key drivers of premium increases, but the cost of reinsurance was the leading factor voiced by 82% of respondents.

While UK insurers may be feeling some respite as economic inflation steadies, alleviating the pressure of the rising costs of settlements, consumers are still wary and prioritise affordability above all. The result is a persistently challenging market for UK insurers that must continue to weigh customer expectations around affordability against profitability.

Meanwhile, insurability continues to plague UK insurers as they contend with evolving risks, particularly in relation to the frequency and severity of weather events, lingering supply chain issues and sector specific risks such as the rise in cargo theft, as recently highlighted by Anthony Smith, CEO, W K Webster — A Gallagher Bassett Company.

Getting the balance wrong between affordability and insurability can not only squeeze profit margins but also create vulnerability gaps in the population that draw regulatory attention, so insurers must be cautious. Working with specialty consultants to implement tight underwriting criteria and employ forward-thinking risk management and prevention strategies — as well as leveraging data and analytics — are some of the key strategies we expect insurers to employ in 2026 to maintain comprehensive and sustainable coverage solutions.

Data and Cyber Security

In 2025, only 33% of UK respondents regarded data and cybersecurity as a significant risk, but concern seems to have risen widely, and it appears firmly planted in the top three challenges according to our 2026 Claims Insights survey data.

The threats aren't new but are becoming more advanced, and the outcome of breaches is becoming more severe. It's not surprising that there's a seemingly universal consensus that countering threat actors and protecting organisations' bottom line and reputation are now vital.

Earlier this year, Ashley Easen, director of Consulting, examined the future of social engineering and delved into deepfakes, offering insights into the tactics that threat actors are employing and takeaways for educating employees to avoid exploitation. Both should be high on the reading list for organisations looking to ensure their safety in 2026.

Organisations should also establish a robust cyber threat strategy, which includes evaluating the effectiveness of security protocols and enhancing technological cybersecurity measures for the year ahead.

Our 2026 Claims Insights whitepaper will be released early in 2026. If these challenges are already shaping your plans, connect with our team of experts to gain greater insight into what to expect from the year ahead.