How the 5 Biggest Customer Conversation Trends Will Reshape Insurance in 2026
By Eileen Potter, VP of Insurance Marketing, Smart Communications
Across both P&C and L&A today, insurers are navigating forces largely outside their control: economic volatility, demographic shifts, climate-related losses, and rising regulatory scrutiny. These pressures aren’t temporary. They’re fundamentally reshaping how carriers operate, compete, and engage with customers.
Traditional operating models—especially those built on legacy systems and fragmented workflows—are becoming harder to sustain. At the same time, customer expectations are being set by digital-first experiences outside of insurance, raising the bar for speed, transparency, and personalization.
Many carriers have automated pieces of underwriting, policy administration, and claims, but critical workflows still rely on PDFs, manual reviews, and rekeying. And while AI is moving from experimentation to production, it often stalls without the right data, governance, and operational foundation.
Smart Communications’ 2026 Trends Report explores the seismic shifts reshaping customer conversations. Here’s how five of those trends specifically apply to insurers and what they signal for the year ahead.
Trend #1: Incremental Modernization Is the Foundation for What Comes Next
Modernization is no longer a one-time transformation initiative. Rather, it’s an ongoing capability insurers must build to remain competitive.
Large, multiyear “rip-and-replace” projects are increasingly impractical. Product innovation, regulatory change, and evolving customer expectations are moving faster than traditional IT cycles. Instead, leading insurers are modernizing incrementally, layering new digital capabilities, workflows, and data practices on top of existing policy, billing, and claims platforms.
At many carriers, the focus is shifting to high-friction journeys that exist outside of core systems and are still predominantly manual, paper-based processes: supplemental applications, state-mandated forms (including UM/UIM coverage selection), and the intake of additional claims information after FNOL. These areas carry the greatest operational cost, compliance risk, and customer impact. As Bryan Quasthoff, Vice President of Snapsheet, states in this year’s Trends report:
“A better way [to evolve] is to modernize as you go. Bring in the tools that work alongside what’s already there, then start phasing out the stuff that slows you down once the value is clear.”
This approach isn’t just about digitizing manual steps. It’s about rethinking how work gets done: reducing rekeying, minimizing handoffs, and creating workflows that are modular and adaptable. The payoff is faster cycle times, cleaner data, and lower operational risk, without destabilizing the core systems insurers rely on every day.
Modernization becomes less of a project and more of a continuous capability—one that enables insurers to adapt as market conditions, regulations, and customer expectations evolve.
Trend #2: Data Readiness Is the Catalyst for AI in Insurance
When critical data lives in PDFs, emails, and call center notes, it makes it difficult for organizations to scale AI.
This challenge is particularly daunting in insurance, where information still arrives through fax, mail, static forms, and disconnected channels. OCR and RPA help, but they’re not perfect—they can introduce errors, require rekeying, and slow downstream processes.
When data remains trapped in unstructured formats, it limits what insurers can do:
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- Predictive underwriting stalls
- Claims automation slows
- Agentic workflows struggle to scale
- Compliance reporting becomes harder to sustain
Neeraj Gupta, Insurance Consulting Partner at Ernst & Young, echoes this concern in the Trends report, noting:
“Without strong business sponsorship and measurable impact, AI pilots frequently fail to scale. Inaccurate or incomplete data often leads to unreliable outputs and poor decision-making, making data governance a critical challenge during scaling.”
These limitations are particularly problematic when insurance customers expect speed and accuracy. Furthermore, regulators expect traceability and consistency. Neither is possible without reliable, structured data.
Leading insurers are responding by shifting toward guided digital intake and validating information at the point of entry. This ensures data is accurate, complete, and immediately usable across underwriting, claims, and service, giving AI and automation something dependable to work with from day one.
Trend #3: Agentic AI Will Reshape Underwriting, Claims, and Service
In 2026 and beyond, AI won’t replace underwriters, adjusters, or service teams, but it will reduce the manual work slowing them down.
Today, AI is already being used to support intake, document classification, fraud detection, and triage. The next evolution is agentic AI: systems that can request missing information, validate submissions, route tasks, trigger approvals, and escalate exceptions. As Terry Buechner, Principal Insurance Specialist at AWS, comments in the report:
“Generative and agentic AI is rapidly transforming the insurance industry, with organizations leveraging this technology to drive innovation across multiple areas, including improving the customer experience, streamlining claims processes, and underwriting more accurately.”
This AI shift from passive analysis to active participation in workflows has a twofold result:
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- First, teams spend less time on administrative tasks and more time on complex decisions and customer relationships.
- Second, insurers can deliver more responsive, personalized experiences without increasing operational burden.
But this only works when the foundation is in place. AI depends on structured data, digital workflows, and clear governance. Without them, AI simply sits on top of broken processes—adding complexity instead of value.
Trend #4: Ecosystem Convergence Will Redefine Insurance CX
Customer experience in insurance is increasingly shaped by how well systems and organizations work together.
Today, communications and data are often scattered across CRM platforms, core systems, claims environments, and contact centers. Customers experience that fragmentation as repeated questions, lost documents, and slow resolutions.
Savvy organizations are shifting toward connected ecosystems that unify intake, workflows, communications, and document access. Prashanth Kulkarni, Sr. Director, Strategic Advisor and Enterprise Solutions, NTT Data, sees this as a competitive differentiator:
“The competitive edge will belong to organizations that combine responsible AI with connected, modernized ecosystems—turning compliance and innovation into growth drivers.”
Leading insurers are embracing this approach, with digital front doors, mobile-first engagement, and real-time integrations making it easier for customers to move seamlessly from onboarding to servicing to claims.
When these systems align, the impact is measurable:
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- Faster claims resolution
- Higher straight-through processing rates
- Lower call volumes
- More productive agents and service teams
More importantly, customers experience consistency: clearer communications, fewer errors, and interactions that feel coordinated rather than disconnected.
Trend #5: Security, Trust, and Auditability Define How Far AI Goes
In insurance, innovation only scales as far as regulators, auditors, and customers are willing to trust it.
Carriers manage sensitive personal, health, and financial data under intense scrutiny. Many organizations still struggle with incomplete audit trails, limited consent tracking, and fragmented records of how decisions are made.
As AI becomes more embedded in underwriting, claims, and customer interactions, expectations rise. Decisions must be explainable, auditable, and reversible. Customers and regulators need visibility into where data comes from, how it’s used, and how outcomes are determined.
This is where governance becomes a differentiator. Insurers that embed transparency, accountability, and compliance into workflows from the start will be better positioned to scale AI responsibly—without introducing unnecessary risk or rework.
The takeaway is simple: AI should accelerate value, not uncertainty. And in a regulated industry like insurance, trust is what ultimately determines how far innovation can go. As Aspire CCS Founder and CEO Kaspar Roos puts it:
“Regulatory adherence represents a non-negotiable business requirement that cannot be deferred without exposing the organization to potentially existential consequences.”
Conclusion: The Insurance Playbook for 2026
Insurance is entering a critical period. Inflation, catastrophe risk, reinsurance costs, demographic shifts, and interest-rate volatility are redefining strategic priorities for insurers. At the same time, customer expectations now expect the same clarity, speed, and personalization they experience in other industries and interactions.
The cost of standing still is real: underpriced risk, inefficient operations, frustrated customers and agents, and lost market share.
What separates insurance leaders in 2026 will be how well they strengthen data foundations, modernize without disruption, apply AI responsibly, and deliver more connected customer experiences. Those that treat communication, data, and workflows as one coordinated system will be best positioned to adapt and lead.