2026 Executive Search Outlook: AI, M&A, and Market Shifts

As the insurance industry enters 2026, sustained M&A activity, the accelerating push toward data and AI maturity, and the growing divide between algorithmic and traditional underwriting models are collectively reshaping competitive dynamics across the Specialty and London Markets.

Rising M&A Activity:
Coming into Q1 2026, sustained interest in acquisitions across the Specialty and London Market reflects selective opportunity shaped by uneven performance and varied digital maturity, with recent transactions (from Sompo’s acquisition of Aspen to Radian’s purchase of Inigo and Skyward’s acquisition of Apollo) highlighting the appetite for profitable specialty carriers with strong underwriting discipline, capital efficiency and digital capability. Buyers are prioritising assets with specialist expertise, established broker relationships and scalable operational models, and as softer market conditions increase the urgency for inorganic growth, these investment drivers are only becoming more pronounced.

Data and AI and the Question of Digital Maturity:
As carriers shift from testing AI to building the infrastructure needed for scaled adoption, the gap between aspiration and execution remains evident, with incumbents constrained by legacy systems and smaller firms lacking the necessary frameworks, resulting in scattered initiatives and slow progress in data literacy and AI ownership. With fewer than a third of carriers having a CDO responsible for AI strategy, the market is entering a two-speed environment in which those unable to overcome inertia risk falling further behind, not only operationally but also in attractiveness as acquisition targets. In 2026, as investment moves beyond pilots, data and AI maturity cease to be optional ambitions and instead become the defining competitive divider.

Digitally Led Underwriting:
The Lloyd’s and London Market are increasingly splitting between digital, algorithmic underwriting models and traditional, relationship-driven approaches, a divide sharpened by softening conditions, rising expense ratios and the growing expectation from investors and brokers for strategic clarity. As carriers relying on generic approaches struggle to differentiate, algorithmic models are emerging as a competitive partition, heightening M&A interest in platforms with scalable digital underwriting and lower expense bases. Because algorithmic underwriting depends entirely on robust data and AI foundations, those lagging in digital maturity inevitably fall behind in valuation, operational performance and acquisition appeal, accelerating structural change across the market.

As 2026 approaches, the carriers best positioned for success will be those that recognise the interdependency of these trends, aligning digital maturity, strategic investment and underwriting evolution to compete effectively in a rapidly shifting market.