NTT DATA: Insurance Industry's US$700bn Cyber Risk Challenge

A ripple effect of industries grappling with growing cyber threats is now being seen over at the insurance corner, which is reaching a structural inflection point. 

As cyber threats, climate-related losses and growing liability claims reshape the risk landscape, NTT DATA’s latest Insurtech Global Outlook 2026 report has a clear takeaway: “Risk is accelerating and standing still is no longer an option”.

Cybersecurity has become the largest source of uninsured risk worldwide, the report claims, with uninsured losses expected to soar from US$171bn back in 2023 to more than US$700bn by 2030. 

This comes at a time when climate-related uninsured losses linked to floods, wildfires and extreme weather events have reached US$180bn, with liability claims climbing by 57%.

These trends are placing significant pressure on insurers to rethink their business models and embrace new technologies capable of managing increasingly complex risks.

“The insurance industry is facing structural shifts in the face of unprecedented market volatility and uncertainty,” says Bruno Abril, Global Head of Insurance at NTT DATA.

“There are, however, clear opportunities for insurers to embrace AI-driven solutions to bolster trust and resilience.

“In this report, we identify the key shifts that are shaping insurance in 2026 and translate them into actionable imperatives that can help insurers build long-term value for their businesses, their customers and society.”

AI scaling remains a problem of trust

The insurance industry therefore direly needs process optimisation and agentic AI could be the answer. 

NTT DATA says that automation can deliver up to 35% cost savings, however, a significant gap remains between adoption and implementation.

While 66% of insurance employees are already using AI tools in their day-to-day work, only 22% of insurers have successfully scaled AI solutions into full production environments. 

Interestingly, the barriers are not technological. Instead, challenges around governance, trust, compliance and legacy operating models are the things slowing progress.

Building operational resilience 

NTT DATA’s report puts in black and white, the growing need for insurers to move beyond old-school claims-based, reactive models toward continuous risk detection and decisioning.

As risks continue to outpace insured capacity, insurers are being encouraged to use data, AI and simulation technologies to detect threats earlier and intervene before losses occur. 

This requires going AI native and plugging agentic systems into operations. To do so insurers must deploy responsible AI at scale, with explainability, compliance and human accountability built in. 

This shift reflects changing customer expectations, with hyper-personalised insurance services growing at more than 35% annually.

Demand for prevention-led services is also increasing among employers, with 67% reporting higher investment in preventative measures. 

As a result, insurers are being urged to deliver more empathetic customer experiences that combine personalised support with proactive risk prevention.

The changing insurance market

Curiously, US insurance IPOs have reached their highest level in two decades, highlighting renewed investor confidence in the sector.

Start-up funding patterns are also evolving, with debt financing climbing to US$9.5bn, notably overtaking equity funding.

The report also identifies partner ecosystems as a major growth opportunity. 

With the embedded insurance market surpassing US$116bn in 2025, insurers are increasingly looking to collaboration, open standards and regulation-ready infrastructure to create new revenue streams and expand customer reach.

As cyber risks intensify and market volatility increases, the message from NTT DATA can be summed as such: insurers that embrace AI, prioritise prevention and build stronger ecosystems will be best positioned to thrive in the coming years.