Insurers eye retention and cyber coverage amid 2026 challenges, research shows

Insurers face a potentially turbulent 2026, with economic uncertainty and weather-related catastrophes set to influence underwriting results and profitability. Yet, according to TransUnion’s latest analysis, carriers can still improve performance by focusing on customer retention and product innovation. 

The research, drawn from the 2026 Trends and Outlook Report, highlighted falling retention in 2025 and outlined strategies insurers can adopt to keep policyholders engaged.

Meanwhile, consumer loyalty is increasingly shaped by proactive communication and brand recognition. Policyholders are more likely to stay with their current auto insurer when carriers reach out with premium discounts, alert customers to rate changes before renewal, and maintain a strong brand presence. Generational differences are significant — younger consumers, including Gen Z and Millennials, respond more to brand strength, while Gen X and Baby Boomers value personal outreach. Phone or in-person interaction remains preferred for claims, though AI and app-based updates can supplement live support.

The report also pointed to changes consumers anticipate making in the year ahead, including adjusting coverage or deductibles to reduce premiums, bundling auto with home or renters insurance, and enrolling in discount programs. For insurers, these trends inform product design, pricing, and risk selection, enabling more tailored policies and profitable underwriting.

Small business owners are another focal point, expecting digital experiences comparable to personal lines. TransUnion found that 91% of business customers prefer streamlined online service, yet only 34% report receiving it. Insurers able to provide digital quoting, binding, and service at scale can strengthen retention, lower costs, and expand market share in the SME sector.

Cyber coverage is emerging as both a risk and an opportunity. Over a third of surveyed businesses reported a cyber-related incident in the past year, with social engineering driving around one-third of losses. Despite this, more than half had not purchased cyber insurance, and more than a quarter said coverage was never offered. Nearly two-thirds of respondents said they might switch insurers if cyber coverage is unavailable, highlighting a gap in the market.

TransUnion experts emphasised that insurers can differentiate themselves through digital engagement and targeted coverage.

Scott Learn, advisor for commercial insurance strategic planning, noted that offering robust cyber solutions alongside seamless digital experiences positions insurers as trusted partners for small businesses.

For 2026, carriers that combine proactive outreach, digital service, tailored coverage, and cyber insurance stand to improve retention, enhance underwriting performance, and drive profitability across both personal and commercial portfolios.