Conning says insurers’ success in 2026 will depend on ‘strategic adaptation’

With no small measure of uncertainty in the cards for the insurance industry in 2026, experts at Conning Asset Management say insurers must remain strategically adaptive to stay ahead.

Scott Hawkins, head of insurance research, and Alan Dobbins, director of Conning’s insurance research group, detailed the firm’s 2026 projections for life & annuities, P&C and the overall landscape during a recent webinar.

“As the U.S. insurance industry approaches 2026, it really stands at a pivotal crossroads that we think are defined by rapid transformation and heightened uncertainty,” Hawkins said. “We think this year’s narrative theme is one of strategic adaptation.”

In his view, insurers’ success will depend on their ability to “innovate, manage risk and seize emerging opportunities amid profound macroeconomic and investment shifts.”

“In 2026, insurers should have a set of strategic actions to successfully adapt in a year when the macro environment and sector outlooks, while at first glance seem benign, really remain uncertain,” Hawkins said.

While experts at Conning believe each insurer will ultimately “find their own blend of actions,” they nonetheless reviewed projected trends to take into consideration.

“For the life annuity sector, 2026 means building a scalable platform that links distribution, spread investment, asset management and capital capacity while meeting elevated expectations on transparency and risk control,” Hawkins said.

For the P&C sector, he added, 2026 means “underwriting precision in a more competitive, more heterogeneous market and operational readiness for frequent, costly loss patterns.”

“Across both sectors, 2026 favors companies that can leverage strategic adaptation and can compound advantages that hold up under stress rather than relying upon cyclical tailwinds,” Hawkins said. “That’s our view of what’s going to drive the business in 2026. It will be a year to pair growth with guardrails.”

Five factors to watch in 2026: general trends

Hawkins outlined five key macro environmental issues that could require insurers to adapt their business strategy in 2026:

• Modest economic growth
• Employment
• Inflation
• Asset diversification
• Regulations

He noted that economic growth in the U.S. is projected to hit 1.8 percent this year, which is “not really strong growth,” that could be sufficient to support modest growth and exposures for P&C insurers and also impact L&A insurers’ investment returns, policyholder behaviors and capital requirements.

Additionally, employment is “likely to soften, fostering a positive market for employment and possibly aiding sales and helping with recruitment efforts.” Inflation also seems to be beginning to decrease, although Hawkins also pointed out that the impact of announced tariffs has yet to be fully realized.

At the same time, investment income is expected to continue to be a critical tailwind for insurers this year — especially if inflation, GDP growth and unemployment “cooperate,” Hawkins said. To this end, asset diversification could result in a yield environment that is lower than recent peaks, but still relatively elevated.

Finally, Conning expects the insurance regulatory landscape to continue to see “significant new requirements from the NAIC, SEC, FINRA and state regulators” that will affect solvency, valuation, disclosure, distribution and technology practices across both L&A and P&C.

Life & annuity projections

Apart from these general factors, Hawkins also outlined six factors that will impact L&A in 2026:

• GLP-1
• Guaranteed income
• Private credit
• New ecosystem: insurer-asset management convergence
• Reinsurance
• Alternative investments in 401k plans

He noted that the growth of private credit as an asset class, the emergence of asset manager platforms and capital-efficient reinsurance infrastructures in particular are connected and will likely continue to develop in 2026.

The L&A sector is also expected to develop into two new markets: guaranteed income as a scalable distribution solution inside 410k plans and alternative investments inside 401k plans.

GLP-1 drugs used for weight loss, such as Ozempic and Wegovy, could also impact mortality, morbidity and longevity trends, and Hawkins believes the L&A sector could begin to closely monitor those impacts this year.

Meanwhile, life and annuity insurers have turned to reinsurance to support their growth to such an extent that it’s now become “the third leg in an insurer asset management platform.” Additionally, private credit usage is expected to continue growing even while carriers become “more selective and with heavier governance on the type of investment.”

“I think the big narrative here is that we think life annuity insurers in 2026 will be guided by a theme of convergence. That’s where product demand, investment strategy and balance sheet capacity will all be increasingly linked, and where you’ll find competitive advantage shifts from isolated decisions to an integrated platform among strategic partners. That’s where you’ll capture growth.”

Property & casualty projections

On the P&C side, Dobbins noted six top projections for 2026:

• Slowing premium growth
• Secondary perils drive losses
• Competitive behavior in personal auto
• Changes in distribution landscape
• Uptick in cyber insurance coverage
• Significant growth in casualty ILS

He noted that moderate growth is expected overall for P&C insurers in 2026, but commercial auto is expected to maintain strong rate increases over the course of the year. On the other hand, workers’ compensation and personal auto were projected to have the slowest growth of the major product lines.

“Together, these trends will shape a more complex, competitive and innovative property casualty market this year,” Dobbins said.

Conning is a global insurance asset management and investment firm founded in 1912 and based out of Hartford, CT. It is now part of Generali Investment Holdings, the investment arm of Generali Insurance.

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