Insurance customers expect products that reflect changing risks, service that provides clear answers, and buying journeys that fit their habits. In 2027, insurers will face pressure on all three fronts. New products will address unmet needs, while AI will play a larger role in service. Here are three of our predictions for the insurance industry in 2027:

  • Parametric coverage will enter the mainstream. Companies increasingly use parametric insurance alongside traditional property programs to fill gaps in catastrophe coverage. Greater competition among underwriters has reduced rates, and we’re seeing faster payouts. Jamaica’s parametric catastrophe bond qualified for a full $150 million payout following Hurricane Melissa while conventional claims from the same storm took months to settle. In 2027, brokers will quote parametric coverage more frequently. Incumbent insurers must be ready to provide this layer or watch brokers place it with specialist markets.
  • One in five insurers will launch a longevity-focused product. Longer lives are changing how consumers plan for retirement income, healthcare costs, and financial protection. Forrester found that 62% of US online adults considered living significantly longer than previous generations when planning their future, while 52% were concerned about its effect on their finances. Insurers will respond with offerings that combine elements such as term life insurance, retirement income, and healthcare savings.
  • A third of insurers will add agentic AI to customer experience. Leading insurers already use agentic AI to analyze information, orchestrate workflows, gather evidence, and generate recommendations. Most carriers will stop short of allowing an unsupervised AI agent to bind or decline coverage, set a price, deny a claim, or authorize a payout. Insurers that do grant agents greater authority have evaluation frameworks, controlled access to data, auditable processes, and clear rules of engagement for employees and AI agents. Others will have to strengthen these foundations before extending agentic AI into regulated decisions.

Discipline Will Separate Experimentation From Progress In 2027

Insurance leaders will need more than a collection of product launches and AI pilots. They must develop a clear method for deciding which customer problems deserve investment, which technologies are ready for operational use, and which decisions must remain under human control.

Moving promising ideas from isolated pilots into controlled scaling requires accountable owners, defined measures, appropriate technology foundations, and employees who understand when to rely on automated support and when to intervene. Doing it quickly will matter, but knowing where to set limits will matter just as much.

Forrester clients can read our full Predictions 2027: Insurance report for more detail on each prediction, plus two bonus predictions. Set up a Forrester guidance session to discuss these predictions with me and plan a 2027 insurance strategy and roadmap that will set your organization up for success.

If you aren’t a client yet, download our complimentary Predictions guides and access additional complimentary resources, including webinars, on the Predictions 2027 hub.

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