UK insurers are expected to place artificial intelligence governance and third-party risk management at the top of their priorities in 2026 as operational complexity, regulatory expectations and digital dependence continue to intensify. The shift reflects growing recognition that technology-driven risks now sit at the core of insurers’ business resilience and governance responsibilities.
AI adoption across underwriting, claims, pricing and customer engagement is accelerating, delivering efficiency and improved decision-making. However, insurers are increasingly aware that unmanaged AI risks—such as model bias, lack of explainability, data quality issues and regulatory non-compliance—can lead to reputational damage, supervisory action and customer harm. As a result, insurers are strengthening oversight frameworks to ensure AI systems are transparent, auditable and aligned with ethical and regulatory standards.
Alongside AI, third-party risk is emerging as a major area of concern. Insurers rely heavily on external vendors for cloud services, data analytics, claims processing, insurtech platforms and outsourced operations. Disruptions, cyber incidents or governance failures at third-party providers can quickly translate into operational outages, data breaches or regulatory breaches for insurers themselves.
The growing interdependence between insurers and their suppliers has increased expectations around due diligence, ongoing monitoring and contractual controls. Firms are being encouraged to move beyond point-in-time assessments and adopt continuous third-party risk oversight, particularly for critical and high-impact service providers.
From a regulatory and risk management perspective, these priorities align with broader supervisory focus on operational resilience, outsourcing governance and technology risk. Insurers are expected to demonstrate clear accountability, board-level oversight and integrated risk frameworks covering both internal systems and external dependencies.
As digital transformation deepens, UK insurers are recognising that effective risk management in 2026 will depend on how well they govern advanced technologies and manage extended enterprise risk. Firms that embed strong AI governance and third-party controls are likely to be better positioned to maintain trust, meet regulatory expectations and operate resiliently in an increasingly interconnected risk environment.
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