As we approach 2026, it's clear that the insurance industry needs to focus on something more foundational than product innovation or operational efficiency: rebuilding and strengthening trust. Whether in property & casualty (P&C) or life & annuity (L&A), trust is emerging as an important differentiator, yet it is the hardest to maintain in an environment defined by climate volatility, rising costs, demographic shifts, and accelerating automation.
Right now, insurers face a dual challenge. They must navigate economic and regulatory pressures while also meeting customer expectations shaped by real-time digital experiences in every other part of consumers' lives. That means the industry can no longer view communication as a compliance requirement or an operational task. Communication is the customer experience, and ultimately the foundation of trust.
The 2026 Challenge for P&C
For P&C insurers especially, 2026 is shaping up to be another turbulent year. Rising premiums – driven by higher reinsurance costs, climate-related catastrophe losses, supply-chain volatility, and inflation – are straining affordability. And when coverage feels more expensive while service feels inconsistent or complex, customer trust erodes.
So the question becomes: How do insurers maintain trust at a moment when customers are being asked to pay more?
Across industry studies and customer research, three actions matter most:
1. Explain the "why."
Transparency around rate drivers is strongly correlated with retention. While weather trends, rebuilding costs, inflation, and fraud patterns are all out of insurers' control, and premium increases are something that will never make a customer happy, these factors make sense to policyholders when communicated proactively and clearly.
This is an area where insurers can create real differentiation. A renewal communication that simply states "your premium is increasing" feels one-sided. A renewal that explains why the price changed, how the customer's risk profile evolved, and what the insurer is doing to help reduce costs over time feels partnership-oriented.
2. Increase transparency throughout the journey.
Claims remain the emotional center of insurance. Forrester's 2026 outlook underscores that even when claim outcomes are favorable, perceptions of fairness and trustworthiness are shaped most by transparency through real-time status updates, clear next steps, consistent messaging across channels, and expectations set early and often.
This is also where operational gaps tend to show. If one message comes from the portal, another from the adjuster, and a third from email or SMS – each with a different tone – customers sense misalignment. Consistency and transparency across every channel signals competence, care, and honesty.
3. Make every interaction worth the premium.
People trust organizations that demonstrate reliability, humanity, and capability in real time – not just in marketing.
In other words: customers judge the value of insurance not just at the point of loss, but through every touchpoint, whether for billing, servicing, onboarding, updates, coverage changes, or support. Transparent, consistent, multi-channel communications will be essential to demonstrating that value in a world where premiums continue to rise.
The L&A Perspective: The Trust Gap with Younger Buyers
L&A insurers face a different challenge, one shaped by demographic shifts and a stark contrast in purchasing motivation.
On one hand, the aging population is creating unprecedented momentum: 4.2 million Americans will turn 65 this year, and the wave of retirees has contributed to a dramatic rise in annuity sales, reaching $432.4 billion in 2024, up 12% year over year. For older buyers, the value of retirement income solutions is clear and immediate.
But beyond annuities, L&A products are struggling to capture interest, especially among younger or less financially secure consumers. According to a LIMRA study, younger buyers look, compare, and browse – but do not purchase. Why?
- They are unsure whether the products are worth the cost.
- They often feel the industry does not communicate in ways that are relevant to their financial realities.
- They question whether insurers have their best interests at heart.
Building relevance for younger generations means meeting them where they are: with clarity around value, real-world scenarios that make protection feel tangible, and messaging that explains benefits in everyday language. It also means demonstrating affordability and flexibility – not just in price, but in how insurers communicate, educate, and guide.
The organizations gaining traction with younger customers are leaning heavily into personalized digital journeys, plain-language education, and transparent explanations of how products fit into broader financial wellness and not solely on risk mitigation.
The Trust Imperative for AI in Insurance
Overlaying all of this is the accelerating adoption of AI across underwriting, claims, service, and customer engagement. According to a McKinsey report on the future of AI, insurers see AI as a path to efficiency and accuracy, while customers see risk – particularly around data privacy, bias, and fairness. Public awareness has grown significantly, and regulators are moving quickly.
So the question shifts again: How can insurers build and maintain trust while deploying more AI across the value chain?
A trustworthy AI strategy looks like this:
Be transparent.
Publish clear, accessible notices that describe where and how AI is used, whether for underwriting insights, claims triage, personalization, or fraud detection.
Be accountable.
Explain the safeguards in place to prevent bias or incorrect outcomes and commit to human oversight for material decisions. Make it clear that customers can opt out where appropriate.
Give customers a voice.
Provide simple methods for policyholders to query, appeal, or request review of any AI-driven decision. That two-way transparency is foundational to maintaining trust. AI doesn't erode trust – opaque AI does. When insurers use AI to improve clarity, reduce friction, and increase fairness, customer trust grows rather than diminishes.
The Bottom Line: Trust Is Built Through Communication
As 2026 approaches, one theme cuts across all insurance segments: trust is earned in moments, and communication shapes those moments more than any other factor.
Whether explaining a premium change, guiding a customer through a claim, educating a first-time life insurance shopper, or deploying AI responsibly, insurers must treat communication as a strategic capability, not a back-office task.
The organizations that will lead the market are those that communicate clearly, consistently, and proactively; meet customers across channels with a single, unified voice; make interactions personalized and empathetic; explain the "why" behind every major decision; and demonstrate responsibility and transparency in their use of emerging technologies.
Insurance is, at its core, a promise. And a promise is only as strong as the trust behind it. The industry has a rare opportunity to strengthen the partnership between insurers and policyholders – through transparency, communication, and a commitment to treating every interaction as a moment that matters.
