Like previous years, 2026 brings both challenges and opportunities that shape the priorities of the European insurance industry. As insurers strive to modernise, they need to navigate around new regulations, growing customer expectations, dizzyingly fast-paced technological advancements, and increased impact of natural disasters, among others.
In 2026, leading insurers will continue to adopt LLM-powered chatbots and other generative AI applications, advancing digital transformation and reshaping customer interactions, claims processing, and risk assessment. From a regulatory perspective, the EU insurance sector is now operating under the Digital Operational Resilience Act (DORA), following the 2025 implementation deadline.
In this blog, we summarise the main insurance trends in 2026 based on insights from our experts, as well as reports released by thought-leading consultancies.
The insurance sector’s transformation to a digital-first approach has long been challenged by high-security processes, such as due diligence, KYC, and authorisations that traditionally favour in-person interactions and paper-based documentation. Additionally, insurance brokers, who often follow more traditional practices, further complicate the digital shift within the sector.
In an international survey of over 20 insurance leaders about what is shaping the industry, the majority cited factors related to digitalisation, data-driven insights, (Gen)AI, and working in the cloud. The insurance industry in Europe, however, is still in the early stages of digitisation, as one of the more risk-aversive industries within financial services.
Fortunately, insurers don't need to reinvent the wheel when it comes to digitisation. First and foremost, there are a variety of advanced digital identity tools that insurers can seamlessly integrate to securely conduct KYC/AML due diligence, such as EU-based itsme®. This eliminates the need for physical evidence or in-person presence to create an account, submit a claim, provide a qualified signature, or update personal details. We explore other major technological trends in insurance later in this blog.
Insurance companies are also already exploring possibilities with GenAI and LLMs to modernise and digitise their efforts, which is an insurance trend that we expect to only get more prevalent over the coming years. Examples of such applications include:
Using AI-driven automation to analyse claim descriptions, medical reports and policy terms more quickly and efficiently. This also helps in detecting fraudulent claims by analysing patterns and inconsistencies in the language and images found in submitted documents.
Relying on GenAI-powered chatbots to handle customer inquiries, policy renewals, and claims tracking.
Relying on Gen AI–powered copilots to support agents and other salespeople to improve and personalise their customer support based on customers’ details.
Continue reading: 5 ways digital identity tools enable the insurance sector's transformation
Insurance companies are facing shrinking profit margins due to different macroeconomic factors, from rising inflation to fluctuating interest rates. Insurance companies' bottom lines are also experiencing significant losses due to the increasing frequency of natural disasters linked to climate change. For instance, the 2021 flooding in Wallonia in Belgium resulted in insured losses of approximately €2.07 billion.
To strengthen their resilience and boost margins, many insurers are reimagining their value chains as networks of embedded digital services. By using specialised API-based platforms, they can integrate products into the ecosystems of other insurers, InsurTechs, and third-party distributors, supporting the growing model of embedded insurance, where coverage is offered directly with a product at the point of sale. Embedded insurance could reach over $70 billion in gross written premiums by 2030, up from around $13 billion in 2025. Insurers adopting this model are already seeing higher conversion rates than those selling standalone policies while unlocking previously untapped customer segments.
As insurance companies strive for accessibility for clients, however, one big challenge that arises is the need to adhere to all KYC/ AML requirements without disrupting customer onboarding. While this is by no means an easy task, insurance companies can easily rely on digital identity solutions to remotely fulfill identity verification and authentication requirements, all the way to providing legally recognised e-signatures.
Learn more about itsme®, the leading digital identity platform in Europe
A report by EIOPA showed that among European insurers, digital-only distribution channels still lag well behind physical or hybrid ones, such as phone calls, emails and face-to-face meetings. For instance, it is not uncommon for clients to be asked to send physical documents by mail to process a claim (such as signed doctor's reports, paper application forms, or passport scans). Additionally, most traditional insurance platforms limit customer control, focusing on support and claims rather than enabling users to adjust coverage or update policies in real time.
Failing to provide today's customers with seamless digital experiences can mean quickly losing them to competition, especially with the shrinking gap between insurance customers who prefer online vs. in-person interactions.
Insurance leaders already know well the importance of enhanced customer service. According to a PwC survey, 80% of insurance CEOs embedded customer satisfaction metrics in their long-term corporate strategy. Additionally, a report by Strategy& showed that enhanced customer experience is the first outcome that 6 European insurance leaders seek from their digital transformation.
LLM-powered customer support chatbots, conversational AI integrations and Natural Language Processing (NLP) can help automate claims processing and speed up processes related to interpreting inquiries and customer due diligence. Moreover, cumbersome practices around identity and claim verification can become fully digitised with the help of digital identity platforms, cutting the time it takes to conduct KYC from days to seconds.
While transforming to a digital-first customer experience requires big investment and commitment from insurers, it is surely worth it. According to McKinsey, insurers who move from the bottom quartile to the top in customer experience can witness up to a 30% increase in the rate of winning new business and a 20% to 30% reduction in policy cancellations.
Learn more about the defining role of digital identity in the insurance sector
Insurance companies increasingly recognise the need to replace paper-based work and siloed databases with a single-source-of-truth of data (on-premises or in the cloud).
The shift to a more data-driven way of working plays a major role in helping insurers enhance their data accuracy and quality, comply with regulations such as GDPR and DORA, protect themselves against cyber threats and breaches, personalise customer service with advanced analytics and insights, and save on operational costs. For instance, insurance leader AXA in Belgium migrated their work to the cloud, enhancing customer service, agility and cost transparency.
Unfortunately, many challenges lie ahead of insurers as they try to become more mature around their data. For instance, the data of many clients lies with brokers, who often maintain incorrect customer data, leading to cleanup initiatives by insurance companies.
Fortunately, insurers can get a head start when it comes to storing and managing their user data by relying on a myriad of specialised platforms. An example is digital identity platforms, such as itsme®, which can help insurers digitise customer verification, authentication and consent management while ensuring regulatory compliance, enhancing data security, and facilitating seamless customer interactions.
Continue reading : The future of personal data sharing and ownership in the EU