The global insurance industry has reached a structural inflection point as accelerating risk outpaces the sector’s capacity to absorb it, with cyber protection emerging as the single largest source of uninsured risk worldwide, according to new research from NTT DATA.

The technology services group’s Insurtech Global Outlook 2026, released on Monday, found that uninsured cyber losses are projected to climb from $171 billion in 2023 to more than $700 billion by 2030 — making cybersecurity the top business insurance risk. The report frames the moment in stark terms: with risk accelerating, standing still is no longer an option for insurers.

Cyber risk leads a widening protection gap

The protection gap — the difference between economic losses and what is actually insured — is widening across several fronts. Climate-related uninsured losses from extreme weather, floods and wildfires now total $180 billion, while liability claims have risen by 57 per cent. The ASEAN region’s protection gap has drawn particular scrutiny from policymakers as a pressing concern for economic resilience.

At the same time, the report points to a shifting funding landscape. US insurance IPOs have reached a 20-year high, and startups are increasingly turning to debt, with debt financing reaching $9.5 billion and surpassing equity funding.

AI adoption runs ahead of AI scale

NTT DATA found that building AI-native and agentic operations could deliver cost savings of up to 35 per cent through automation and process optimisation. Yet a clear bottleneck remains: only 22 per cent of insurers have scaled AI to the production phase, even as 66 per cent of the insurance workforce has already adopted AI tools.

The constraints, the report stresses, are not primarily technological. They stem from gaps in trust, governance and operating models that were never designed with AI in mind.

“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,” said Bruno Abril, Global Head of Insurance at NTT DATA. “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.”

Four imperatives for insurers

To help insurers respond, the report sets out four priorities. It urges firms to build resilience into operating models by shifting from reactive payouts to continuous risk detection and prevention, and to deploy responsible AI at scale with explainability, compliance and human accountability built in from the start.

It also calls for prevention-first, AI-native customer experiences — noting that hyper-personalisation is growing at a compound annual rate above 35 per cent and that 67 per cent of employers are increasing prevention spending. Finally, it points to partner ecosystems as a growth driver, with the embedded insurance market having exceeded $116 billion in 2025.

The Insurtech Global Outlook 2026 draws on industry data, market trends and risk indicators from insurer disclosures, third-party research and NTT DATA analysis covering the 2023 to 2025 period.