Investment Considerations for Insurers in 2026

As the insurance industry looks toward 2026, uncertainty feels less like a temporary challenge and more like a feature of every strategic discussion.

In this environment, the decisions insurers consider, postpone, or prioritize may become just as important as the conditions themselves.

The macroeconomic conditions have become more demanding. Globally, rate moves are less predictable, inflation persistence in some regions is altering liability behavior, and regulatory regimes continue to refine how capital strength is assessed. These forces require insurers to revisit asset allocation choices with discipline to help ensure they are aligned with balance sheet objectives. The environment is rewarding firms that can run tighter capital optimization routines, integrate scenario analytics into day-to-day decision making, and place a greater premium on liquidity planning. What is changing most is not the tools available, but how quickly they may need to be applied as conditions shift.

AI is quickly moving from experimentation to integration across underwriting, claims, distribution, and investment functions. The potential upside is significant, particularly where it could shorten processing times, improves portfolio analytics, or enhances customer outcomes. Yet the risks are equally real. Data governance gaps, model drift, operational fragility, and regulatory expectations around explainability all require careful attention. Insurers are learning that AI adoption is not primarily a technology challenge, it is a risk governance challenge. In our view, the firms that benefit most will be those that embed AI into existing control frameworks, rather than bolt it on to legacy processes.

Meanwhile, complexity is leading many insurers to seek partnerships as a mechanism for scaling capability, entering new markets, and gaining access to specialized expertise. Whether in technology, asset management, distribution, or data infrastructure, collaboration is now part of the operating model. These relationships are reshaping how insurers organize around growth. They reduce time to market, broaden the toolkit for solving complex problems, and provide more flexibility than traditional build or buy decisions. As business models evolve, partnership strategies are becoming a meaningful source of competitive differentiation.

Against this backdrop this year’s Top Considerations report explores five areas top of mind for insurers across 2026 as they navigate these challenges:

1. Understanding the volatile market environment for insurers
2. AI risks and opportunities
3. What is driving the growth in insurance investment partnerships
4. What are the challenges and opportunities in private credit for insurers
5. Unlocking the capital potential of insurers

READ MORE FROM MERCER