Welcome to 2026. Over the past year, I’ve spent a lot of time talking with CX, technology, and business leaders across carriers, brokerages, and insurtechs. Sometimes those conversations happen at conferences. More often, they take place in smaller rooms—on Zoom calls, in client workshops, or in working sessions where teams are tackling very real constraints for their customers and employees.
Different companies, different roles, same underlying themes.
AI has entered the chat. Again. So has modernization. That won’t be news to anyone who spent time at ITC, ITI, or Insurtech NY like I did last year (and yes, let’s mix up those agendas a bit in 2026. It can’t all be AI transformations). What has changed is how people are talking about these topics. The tone has shifted from aspirational to honest. Leaders, some still nursing early-adopter wounds, are more willing to admit what isn’t working, where progress has stalled, and where technology alone hasn’t delivered the impact they expected.
One story stuck with me. A senior leader at a mid-sized carrier talked me through the outcome of his team’s test of an AI-assisted underwriting tool. On paper, he said it was a success: the model worked, the data was sound, the pilot hit its accuracy targets. But no one was using it.
When we dug in, the issue wasn’t just trust in the AI. The issue was everything around it. Even underwriters who believed in the model still had to jump between systems, re-enter data, and manage work across spreadsheets and inboxes. In a vacuum, the AI worked fine. In the real world, it didn’t remove friction; it just sat on top of it. As this guy put it: “We didn’t change the work. We just piled it on.”
I hear versions of that story all the time.
At the same time, I’m feeling a growing sense of realism across the industry. On intro calls, leaders are openly acknowledging that legacy systems are still (still!) holding them back. In the field, we’re hearing that agents and brokers, despite years of disruption narratives, are still the key to how insurance actually works. And that many hyped digital experiences, while “functional,” aren’t doing much that really matters to customers or employees.
From my POV as CEO of a CX design and innovation agency working exclusively across the insurance ecosystem, this feels like a turning point. The industry has spent years investing in tools, platforms, and pilots. Now the hard work is deciding where to focus, what to simplify, and how to design experiences that actually improve how people do their jobs and navigate critical moments.
As we head into 2026, the opportunity isn’t to do more. It’s to be more deliberate about how and when to use AI, where modernization matters most, and where human judgment, trust, and experience still need to lead.
Cake & Arrow’s 2026 New Year’s resolutions for insurance
Now, let’s look at eight New Year’s resolutions for insurance the Cake & Arrow team is setting for 2026. They’re informed by what we’ve seen in our client work, our research, and the countless conversations we’ve had with insurers, brokers, agents, and insurtech leaders over the past year.
Think of these as priorities, not predictions.
Each one points to a place where insurance orgs can get past incremental change and start creating experiences that are genuinely easier to use, easier to trust, and easier to work within, whether you’re a customer dealing with a claim, an underwriter managing risk, or an agent trying to look sharp for clients.
While these themes chime with familiar industry trends—AI, modernization, talent, distribution—they’re grounded in a pretty basic goal: let’s use tech and design more intentionally to make insurance work better for the people who depend on it every day.
Resolution 1: Double down on digital CX
Digital is now table stakes, and still underperforming.
Obviously, the insurance industry has made real progress in digital transformation over the past decade. Portals, apps, and online journeys are now the norm. But while many of these experiences are technically functional, but functional doesn’t always mean valuable.
In fact, while 83% of insurers deliver digital experiences that work, only 4% deliver experiences customers actually find valuable.
We see this problem often enough in our client work. Insurers want to redesign their portals, workbenches, systems, and apps not because they’re broken, but because they were built to digitize existing processes rather than solve real user problems.
In 2026, digital isn’t a differentiator. Sustainable value comes from research-driven, human-centered UX that improves processes, reduces friction, and benefits customers, agents, and employees. It’s past time for insurance organizations to double down on digital CX that delivers real value for employees and customers.
Resolution 2: Modernize your agent and broker channels
They remain critical, but many are falling behind.
Agents and brokers are still the trusted, preferred channel. As decisions grow complex or emotional, customers still want human involvement. Insurers are now focusing on improving essential agent and broker experiences.
Agents continue to rank as the #1 channel for trust and satisfaction, and one in five customers say they would switch carriers if their agent left. At the same time, the broker market is expanding rapidly, with consolidation creating fewer, more sophisticated buyers who expect better tools and tighter integrations.
What’s changing is how agents and brokers work. A surge in AI-powered portals and carrier–agency integrations is reshaping expectations. Teams that use modern digital tools consistently outperform those that don’t. Less burdened by outdated systems and broken processes, they’re able to deliver faster, more insightful, and more empathetic service to their clients.
Modernizing agent and broker experiences can’t be put on the back burner anymore. It’s how insurers protect their strongest distribution channels while enabling scale, speed, and consistency in an increasingly complex ecosystem.
Resolution 3: Take a phased approach to modernization
The biggest barriers to transformation are still holding on.
Legacy technology remains the single biggest drag on insurer innovation. Today, roughly 70% of IT spend still goes toward maintaining legacy systems, leaving little room for meaningful improvements to the experience.
We see the impact of this every day. The insurers making real progress aren’t the ones betting everything on massive, multi-year “big bang” transformations. In fact, those programs are often the ones we’re brought in to help recover. The teams moving fastest are taking a more pragmatic path. They are modernizing in phases, adopting API-first architectures, using low-code platforms, and, increasingly, leveraging GenAI to understand and untangle existing systems.
Most organizations can’t afford to rebuild core systems from scratch. The most successful ones modernize where it counts—focusing first on the systems customers, agents, and employees use every day, instead of waiting for a future state.
Phased modernization allows them to unlock value for customers, agents, and employees now, while creating momentum and confidence for broader change over time.
Resolution 4: Use AI to solve real problems…
…not to build tools no one wants or needs.
While AI adoption in insurance is nearly universal, most insurers are still struggling to see value. 91% of insurers have implemented AI tools, yet only 12% say those solutions meet adoption expectations.
This is familiar: functional technology does not guarantee value. Previous digital moves merely replicated existing processes. AI risks repeating that pattern.
In our experience, the tech is rarely the issue. The tools are often impressive, yet frequently layered onto already inefficient workflows. Too often, AI gets added without first understanding the users or their actual challenges.
This is where things tend to fall apart. Teams aren’t sure where AI will genuinely make work easier or improve decision-making, because no one has taken the time to understand real workflows and the moments of friction.
Without that understanding, AI simply accelerates broken processes. With it, AI starts doing what it’s supposed to: reducing effort, improving judgment, and helping customers, agents, and employees get their work done with more confidence.
Resolution 5: Embed Insurance, when and where it makes sense
It can reduce friction and acquisition costs, but it’s not right for everything.
Embedded insurance is growing fast. The global market is projected to quadruple by 2030, driven by its ability to dramatically reduce friction and cut acquisition costs by up to 75%.
When done well, coverage appears at the right moment, in the right context, without forcing customers out of their journey. This makes it especially effective for straightforward personal lines like travel, warranties, auto, and homeowners.
But not all insurance should disappear into the background.
More complex products, particularly in commercial lines, are going to require a deeper level of experience. Buyers need confidence, education, and reassurance. They need to understand tradeoffs, assess risk, and trust both the product and carrier behind it. In these cases, brand, expertise, and relationship still matter.
This is where the idea of “intentional friction” becomes critical.
Not all friction is bad. Some moments of pause, explanation, or human interaction are essential to helping customers make informed, high-stakes decisions. The challenge isn’t eliminating friction everywhere, but knowing where to reduce it and where to design for understanding and trust.
User research can help teams make these calls. Customer interviews, journey mapping, and user testing can help teams find the rougher patches and see whether they’re a barrier to conversion or a feature that supports confidence and clarity.
Embedded insurance is a powerful channel for reducing friction and acquisition costs, but its success depends on understanding real customer behavior. The best experiences balance speed with clarity. They remove some obstacles completely, and slow things down when people need time to understand what they’re buying.
Resolution 6: Modernize your underwriting
The efficiency gains are too big to ignore.
There is no question that underwriting is ripe for transformation. Today, underwriters spend only 26% of their time actually underwriting, with the rest lost to fragmented tools, manual handoffs, and administrative drag.
In a recent underwriting modernization project, we saw firsthand how that fragmentation plays out. Underwriters regularly moved between five to ten systems, relying on personal spreadsheets, calendars, multiple monitors, and chat threads just to manage their workload. Queue management was often manual, and once work left the desk, visibility dropped off, leading to rework, delays, and increased cognitive load.
Modern underwriting platforms, increasingly powered by AI, are starting to close these gaps by consolidating workflows, improving case visibility, and reducing reliance on workaround tools. Carriers adopting these approaches are seeing 10–20% increases in sales conversion and 20–40% reductions in onboarding costs.
But the biggest gains don’t come from automation alone. They come from rethinking how underwriting work actually flows, with better case management, clearer workload visibility for managers, built-in collaboration, and UX designed for data-dense, judgment-heavy decisions. When underwriters can focus on risk evaluation instead of navigating systems, they get more efficient without giving up autonomy or trust.
Resolution 7: Treat employee experience as customer experience
Insurance needs to transform from the inside out.
The insurance industry is running toward a talent cliff. Half the workforce is expected to retire over the next 15 years, leaving hundreds of thousands of roles unfilled. Our own recent research on Gen Z workplace preferences shows that a large majority of young professionals have never even considered insurance as a career. They see insurance as boring, unethical, and outdated (ouch).
At the same time, employee expectations have changed. People expect modern tools that support sound decision-making, not systems that get in the way. Employee experience isn’t just an HR issue; it’s a customer one. When employees are frustrated by clunky systems, customers feel it in delays, errors, and disengagement. In practice, we’ve seen that modernizing internal tools doesn’t just improve productivity; it increases confidence and job satisfaction, especially among early-career talent who expect their digital work experience to be as smooth as the consumer software they use every day.
The insurers who win the talent war will be the ones who invest in modern, intuitive internal experiences that respect people’s time and expertise, helping make insurance a career that attracts and retains the next generation of workers.
Resolution 8: Revitalize your claims experience
It’s your most important customer moment, and often your worst.
Claims are where trust is tested. They are also where many insurers struggle the most. Our own claims research found that claims experiences are often chaotic, unpredictable, and anxiety-inducing for policyholders due to inconsistent processes, unclear communication, and poor coordination across systems and partners.
Importantly, the claims journey is one of the few moments when policyholders interact directly with their insurer. According to a recent J.D Power study, property claim cycle times now average 32.4 days, the longest since 2008, and customer satisfaction drops by 167 points when repairs exceed 31 days. Despite the impact of delays and uncertainty, only 22% of insurers provide adequate digital status updates, leaving customers unclear about what is happening and what comes next.
There is a meaningful opportunity to improve outcomes with technology. According to the same study, digital claims tools reduce auto repair cycle times from 22.3 to 19.3 days, while another study found that AI-enabled claims solutions can reduce handling time by up to 50% and lower costs by 20%. But speed alone does not rebuild trust.
Across our research and client work, we’ve seen that experience design must sit at the center of claims transformation, ensuring customers have clarity, transparency, and reassurance throughout the process, not just faster back-end processing.
Well-designed claims experiences make customers feel informed, supported, and respected at every step. By streamlining interactions, combining digital tools with human care, and designing systems around how people actually experience loss and recovery, insurers can turn claims into a lasting source of trust and loyalty.
So what now?
We’re under no illusion that resolutions are easy to keep. These aren’t predictions or promises. They’re the result of how our team at Cake & Arrow is making sense of what we’re seeing across the industry right now. Consider them our best guess: grounded in real work, real constraints, and real conversations about where the insurance industry should focus if it wants to make meaningful progress this year.
What feels clear to me is that the next phase of insurance transformation isn’t about doing more. It’s about doing fewer things better, with a much clearer understanding of the people on the other side of the screen.
