Insurance outlook: pricing pressure meets tech strategy

David Seider is chief commercial officer at TheZebra.com, an insurance comparison platform.

Yesterday is history and tomorrow is a mystery, it’s been said. As we turn the page on another calendar year in the insurance industry, the near future doesn’t appear quite as blurry as expected. 

I can see clear patterns emerge that cut through the cloudiness, suggesting a competitive landscape for carriers in 2026.

All roads lead to increased rivalry

In the auto insurance sector, the fight to attract and retain policyholders is about to get fiercer. Consider that many insurers have already taken targeted rate reductions in particular markets, which means consumers will have greater incentives to shop around for savings. But while these targeted reductions help, I foresee persistently high renewal rates as a broader trend. If economic conditions sour or turn recessionary, the increasing price tag of insurance as a percentage of take home pay could put downward financial pressure on many families. This could prompt some to possibly forgo coverage or replace their carriers more frequently to find better deals – possibly at every renewal.

Of course, when goods and services feel more expensive, Americans are more willing to attempt new tactics to drive down costs. That’s why I believe usage-based insurance could get a lot more popular this year. Historically, telematics programs have felt intrusive and confusing to many drivers. But when premiums seem high, consumers are more open to experimenting with any strategy that can relieve price pressure, including tracking their driving habits.

Although 2026 won’t be the year that self-driving cars become mainstream, I anticipate newer, innovative forms of insurance that address liability in these vehicles. Look for specialty policies that split liability between the vehicle’s owner (previously referred to as the “driver”) and the manufacturer, which could anticipate broader industry changes down the road.

Prognosticating property insurance

The home insurance market may see renewed competitive activity after an extended period of contraction prompted by elevated claims costs associated with extreme weather events, inflation and regulatory constraints. That’s because more insurers will pivot back toward growth. 

Following a year like 2025, which should go down as a significantly improved loss-ratio year for home underwriters, insurance companies now confront the challenge of converting that profitability into momentum. As a result, homeowners will likely have more options and additional reasons to shop beyond the traditional limited windows, such as at the time of property purchase or when refinancing a mortgage. And digital shopping could play a bigger role, enabling customers to more effortlessly compare policies and up the frequency of coverage shopping.

When it comes to projecting rate pricing for both home and auto coverage, the two factors that will matter most this year are competition and claim inflation. Assuming loss ratios remain consistent, increased competition will likely dampen the pace of price increases or prompt selective reductions (mostly in auto) to grow market share, even if that means narrower underwriting margins.

But tariffs, spiking labor costs, litigation-linked severity and general inflation over the coming months may amplify the cost of claims, pushing carriers to adjust premiums to remain ahead of loss costs. I see these opposing pressures forcing companies to make difficult decisions and resulting in uneven pricing dynamics. It means consumers will need to shop more strategically than ever before.

The M&A outlook

Reading the mergers and acquisitions tea leaves, I envision investment in artificial intelligence accelerating, most notably in claims-related areas like first-notice-of-loss processes and fraud detection. Established insurers will continue to snap up sharp underwriters who offer creative risk approaches, while private equity players should remain just as active in insurance distribution as they have been.

Redrawing the rules

2026 will also be the year when state legislation and regulatory trends continue to make a big impact. Insurance will continue to be regulated at the state level, but some states could get more legislatively aggressive in permitting or denying rate increases and the extent to which insurers need to justify these increases. For proof, look to recent insurance reforms in Florida and Louisiana, which have led to premium savings for policyholders. Meanwhile, states like California will continue to grapple with how to deploy regulatory tools to attract private insurers back to the state.

A tricky balancing act

The year will present obstacles and opportunities to carriers and consumers alike. Policy providers will need to navigate the competing pressures of inflation and profitability while also implementing technological resources to grow or maintain market share. Meanwhile, fasten your safety belts: whether you’re a driver or passenger on this journey, the ride could get bumpy.