3 Key Technology Shifts for 2026

Originally published by Insurance Thought Leadership on January 16, 2026.

Insurance companies are raising the bar for technology vendors as they transition from viewing AI as a novelty to demanding substance over style. With insurance IT spending forecast to grow 8.5% annually, reaching $420 billion by 2033, carriers are investing heavily in their own AI talent and infrastructure. This shift means insurers can now build polished interfaces and baseline models internally, fundamentally changing what they expect from partners.

Carpe Data's Tom Rasmussen identifies three major shifts for 2026. First, insurers will demand proprietary data pipelines and advanced AI models that meaningfully outperform internal capabilities, rather than flashy dashboards or simple LLM wrappers. Second, carriers will prioritize connected technology stacks and adopt standards like Model Context Protocol (MCP) to accelerate integration, reduce security risks, and enable secure AI innovation while maintaining regulatory compliance.

The third shift addresses a critical pain point: alert fatigue. According to Rasmussen, insurers will seek evidence-based, noise-free insights that directly inform decision-making. By reducing false positives and standardizing how online evidence is used in claims workflows, carriers can balance automation with accuracy while preventing burnout across adjuster, SIU, and litigation teams.

These evolving expectations reflect insurers' strategic maturity. As they become more discerning buyers with substantial in-house capabilities, technology partners must deliver differentiated value through proprietary data, seamless integration, and actionable intelligence. The higher standards will push the entire industry forward, setting the stage for meaningful innovation.

Read the full article at Insurance Thought Leadership.