NTT DATA flags cyber & climate risk surge in insurance
Fri, 19th Jun 2026 (Today)
NTT DATA has published its Insurtech Global Outlook 2026 report, which says the insurance sector is at a structural inflection point.
The report identifies cyber protection as the largest source of uninsured risk, with projected losses rising from USD $171 billion in 2023 to more than USD $700 billion by 2030. It puts climate-related uninsured losses at USD $180 billion and says liability claims have increased by 57%.
Insurance penetration across ASEAN remains at 3.2% of GDP, below the global average of about 7%, according to comments cited from ASEAN Secretary-General H.E. Dr. Kao Kim Hourn. The gap has widened as climate risks and cyber threats increase.
The industry is also grappling with uneven adoption of artificial intelligence. While 66% of the insurance workforce has adopted AI tools, only 22% of insurers have moved AI into production at scale.
The report points to trust, governance and legacy operating models as the main barriers, arguing that these issues, rather than the underlying technology, are holding back broader deployment.
At the same time, AI-native and agentic operations could reduce costs by as much as 35% through automation and process optimisation. That potential comes as insurers face mounting pressure to manage claims, pricing and risk assessment more efficiently as loss trends worsen.
Risk pressures
Cybersecurity ranks as the top business insurance risk in the report's assessment. The scale of projected uninsured losses suggests insurers and corporate customers face widening exposure as attacks become more frequent and costly.
Climate risk remains a major concern. The report cites extreme weather, floods and wildfires as drivers of uninsured losses, underscoring how physical risks continue to outpace available cover in many markets.
Liability claims are also rising, adding another layer of strain. A 57% increase points to a tougher operating environment for insurers already dealing with higher catastrophe costs and a growing need to reassess underwriting models.
AI bottleneck
The report presents AI as a possible response to these pressures but says insurers have yet to overcome organisational obstacles. Staff use of AI tools is running well ahead of formal deployment, suggesting that experimentation inside companies has not translated into broader operational change.
According to the report, responsible deployment will depend on building explainability, compliance and human accountability into AI systems from the outset. It adds that insurers need to redesign operating models if they want to use AI more widely in areas such as detection, decision-making and prevention.
NTT DATA sets out four priorities for insurers: building resilience into operating models, scaling responsible AI, improving prevention-first customer experiences and expanding partner ecosystems.
On customer strategy, the report says demand is shifting towards more personalised and prevention-led services. It notes that hyper-personalisation is growing at more than 35% a year and that 67% of employers are increasing prevention spending.
Funding trends
Beyond underwriting and technology, the report points to changes in insurance finance. It says US insurance initial public offerings have reached a 20-year high, while debt financing has climbed to USD $9.5 billion, overtaking equity funding for start-ups in the sector.
That shift suggests investors are still backing insurance ventures, though the mix of funding sources is changing. For insurtech companies, it may also point to a more cautious capital environment in which borrowing plays a larger role than fresh equity.
The report also highlights growth in embedded insurance, which it says exceeded USD $116 billion in 2025. NTT DATA argues that partner ecosystems supported by open standards and regulation-ready infrastructure are becoming more important as insurers seek new distribution routes and additional revenue sources.
Bruno Abril, Global Head of Insurance at NTT DATA, said the market backdrop is forcing insurers to rethink how they operate. "The insurance industry is facing structural shifts in the face of unprecedented market volatility and uncertainty. There are, however, clear opportunities for insurers to embrace AI-driven solutions to bolster trust and resilience," Abril said.
He said the report was intended to map the main industry changes and their business implications. "In this report, we identify the key shifts that are shaping insurance in 2026 and translate them into actionable imperatives that can help insurers build long-term value for their businesses, their customers and society," Abril said.