Aon and SAGE Launch AI-Powered Crop Insurance
Aon and agricultural risk intelligence company SAGE have launched a precision crop insurance programme that uses artificial intelligence to assess agricultural risk at the individual field level, rather than relying primarily on county-level averages.
The programme will be available to corn and soybean growers across 15 US states for the 2027 crop year. It is designed to complement federal crop insurance by matching coverage and pricing more closely with the value of the insured crop and the underlying risk of each field.
SAGE’s AI models combine data on soil, water, weather, satellite observations and farming practices, along with agricultural research and other datasets. This allows the system to identify differences in risk and resilience between individual fields that may not be visible when pricing is based on broader geographic averages.
Federal crop insurance covers nearly 90% of US corn and soybean acreage, but its pricing is based on average county-level risk. The new approach could therefore allow lower-risk farmland to receive more accurately priced coverage. Some modelling indicates potential savings of $10–$15 per acre for certain growers, although actual savings will depend on individual field characteristics.
The programme is being tested through a four-county Michigan pilot covering more than 1 million agricultural acres, equivalent to approximately 12% of Michigan farmland.
The initiative also seeks to recognise conservation practices such as cover cropping and no-till farming, potentially allowing improved soil health and resilience to become factors in insurance pricing.
For insurers, the development demonstrates how AI, geospatial data and advanced analytics could transform agricultural underwriting, actuarial modelling and risk-based pricing. It also provides an example of how insurance can potentially reward measurable improvements in resilience.
Shadow AI Risk Grows as Governance Frameworks Lag
The growing use of “shadow AI”—artificial intelligence tools adopted by employees without formal organisational approval—is creating new risk-management challenges for businesses. As employees increasingly use generative AI and other AI applications for routine work, organisations may struggle to maintain visibility over how these tools are being used and what data is being shared.
A key concern is that employees may enter confidential, sensitive or proprietary information into unapproved AI platforms. This can create data-security, privacy, intellectual-property and regulatory risks, particularly where organisations have not established clear policies governing acceptable AI use.
Shadow AI can also introduce risks associated with inaccurate outputs, unreliable automated decisions and uncontrolled third-party technology. If employees rely on AI-generated information without appropriate verification, errors can flow into business processes and customer interactions.
The risk becomes more complex as organisations adopt AI across multiple functions. Without central oversight, different departments may use different tools, creating fragmented technology environments and making it difficult for risk and compliance teams to identify the organisation’s overall AI exposure.
Effective governance therefore requires more than simply prohibiting unauthorised AI tools. Organisations need clear AI-use policies, employee training, approved-tool inventories, data controls, monitoring mechanisms and accountability structures.
For risk managers, shadow AI highlights an important shift: AI risk is not limited to formally deployed enterprise systems. Unauthorised employee adoption can create material exposure outside traditional technology-governance frameworks.
As AI adoption accelerates, organisations will need to bring these informal uses into their enterprise AI governance and risk-management frameworks rather than allowing a gap to develop between AI adoption and oversight.
Aon Warns AI Data Centre Risks Could Threaten Financing
The rapid expansion of AI-focused data centres is creating a new challenge for insurers and project financiers as billions of dollars of computing infrastructure become concentrated in a relatively small number of locations. Aon CEO Greg Case warned that such concentration could make some projects harder to insure, potentially affecting developers’ ability to access debt financing.
The risk is particularly significant because a major disruption at an AI data centre could result in business interruption losses running into millions of dollars per minute. Concentration of equipment, power infrastructure and computing capacity can also create correlated exposures for insurers and reinsurers.
Aon has established specialised insurance facilities to address the growing demand, including a $10 billion data-centre facility and a $2.5 billion energy facility. The company is also working with developers at the design stage to assess location, engineering and resilience measures before insurance policies are structured.
The scale of emerging exposure is raising questions about insurance capacity. Case estimates that the global insurance industry currently has approximately $4.5 trillion of capital, but believes this may need to increase to $10–15 trillion to address growing risks from AI, cyber threats, data centres and other emerging exposures.
Aon is therefore exploring greater participation from institutional investors, pension funds, sovereign wealth funds and other alternative sources of capital to expand the capacity available for complex risks.
For insurers, the development highlights the growing importance of risk engineering, concentration-risk assessment, business-interruption modelling and alternative risk capital as AI infrastructure scales.
Lloyd’s Opens Reinsurance to New Investors From 2027
Lloyd’s has announced a new reinsurance arrangement aimed at bringing additional external capital into the reinsurance market from January 1, 2027. Under the framework, brokers can bring a designated portion of their treaty reinsurance business into an arrangement funded by external investors.
The new structure is designed to expand reinsurance capacity and distribute risk among a broader pool of capital providers. Brokers, however, will not be permitted to own the arrangement or provide its capital, helping address potential conflicts of interest arising from their role in placing reinsurance contracts.
Initially, brokers will be allowed to place a maximum of 10% of their total treaty reinsurance business under the arrangement. A managing agent will conduct risk assessment and manage the business, while the associated Lloyd’s member will provide 19.99% of the total capital. At least 25% of the risk-bearing capacity must come from leading reinsurers.
All eligible contracts within the designated portion must be included, preventing brokers from selecting only profitable business. Brokers will also provide business data monthly, with managing agents responsible for verification and Lloyd’s receiving reports quarterly.
The initiative comes as global reinsurance capital reached approximately $688 billion in the first half of 2026, including $147 billion from alternative sources. Lloyd’s reinsurance premium rates declined by 6.7% during the same period.
Additional capital could increase competition and potentially reduce reinsurance costs, although accepting higher risks at lower premiums could also increase future loss potential.
For insurers, the development could eventually improve access to reinsurance capacity and create opportunities for more competitive protection against large risks.
Aviva Launches Location-Based Travel Insurance in Europe
Aviva Insurance Ireland and insureMO have launched a new embedded insurance proposition across Europe that automatically adjusts accident, illness and travel protection according to a customer’s location.
The first implementation is now live in Norway through distribution partner Kvikk Forsikring. Customers receive day-to-day travel cover while in Norway, while travel insurance automatically activates when they travel abroad.
The model removes the need for customers to separately purchase, activate or manage different travel policies when crossing borders. This creates a more seamless insurance experience by connecting coverage directly to the customer’s circumstances.
The partnership combines Aviva’s insurance capabilities with insureMO’s digital insurance platform. The technology supports product configuration, pricing, policy administration, claims management and customer servicing, enabling the insurer to deliver the proposition through an integrated digital ecosystem.
For insurers, location-based embedded insurance represents an emerging distribution model in which protection is integrated directly into existing customer journeys. Instead of requiring customers to actively seek insurance, coverage can be triggered when a relevant risk or activity arises.
The platform is also designed to allow Aviva to introduce additional embedded products, connect with new partners and expand into other European markets without significant changes to its core systems.
The development highlights the growing shift towards embedded, contextual and usage-based insurance, where technology enables insurers to deliver protection closer to the point of need.
For the travel insurance sector, such models could simplify customer acquisition and administration while creating new opportunities for insurers to develop more personalised and responsive protection.
Aon Warns AI Data Centre Risks Could Threaten Financing
The rapid expansion of AI-focused data centres is creating new challenges for insurers and project financiers as large amounts of computing infrastructure become concentrated in individual facilities. Aon CEO Greg Case has warned that these risks could make some projects more difficult to insure, potentially affecting developers’ access to debt financing.
A key concern is the scale of potential business interruption. A major failure at an AI data centre could generate losses running into millions of dollars per minute, while concentrated exposure to power systems, specialised equipment and computing infrastructure could create significant accumulation risk for insurers and reinsurers.
Aon has developed specialised insurance facilities to support the growing data-centre market, including a $10 billion data-centre facility and a $2.5 billion energy facility. The company is also working with developers during the design stage to assess engineering, location and resilience considerations before insurance is structured.
The growing exposure is also raising questions about the availability of insurance capital. Case estimates that the global insurance industry currently has around $4.5 trillion of capital, but believes this could need to increase to $10–15 trillion to accommodate emerging risks associated with AI, cyber threats, data centres and other technologies.
Aon is therefore looking at additional sources of risk capital, including pension funds, sovereign wealth funds and other institutional investors, to expand capacity for complex and rapidly growing risks.
The development highlights the increasing importance of concentration-risk assessment, risk engineering, business-interruption modelling and alternative risk capital as AI infrastructure expands.
Cyber Risk Emerges as the Biggest Trigger of Cascading Risks
Cyber threats have become the risk most likely to trigger or amplify other business risks, according to new research from Hiscox London Market. The Risk in Motion report, based on a survey of 800 risk managers at multinational companies, found that cyber has the strongest connections across the corporate risk landscape.
The strongest interconnected risk pairing was cyber threats and AI-enabled fraud, identified by 55% of respondents. Cyber incidents can extend beyond technology systems, creating economic losses, workforce disruption, regulatory consequences, reputational damage and declining trust.
The research shows that organisations are increasingly experiencing risks simultaneously. 51% of risk managers said they regularly face multiple interconnected risks, while 27% said one risk event regularly triggers another. Meanwhile, 65% believe risks are more interconnected than five years ago, and 94% believe organisations underestimate how far the impact of one event can cascade.
Organisational silos remain a major weakness. 50% of respondents identified coordination across teams, functions or insurance policies as their biggest challenge when multiple risks emerge. Another 46% struggle to determine where one risk ends and another begins, while 84% said siloed business units slow their response.
Only 26% of organisations currently organise risks according to how they interact. This can create gaps when a cyber incident simultaneously produces fraud, business interruption and regulatory exposures across different insurance policies.
Risk investment is nevertheless increasing, with 69% expecting risk-management spending to rise over the next year. However, only 48% believe their current models capture interconnected risks very or extremely well.
The findings reinforce the need to move from siloed risk management towards integrated, scenario-based risk assessment, particularly as cyber and AI risks increasingly interact with traditional business exposures.
Captive Owners Explore New Ways to Finance Risks
Captive insurance owners are exploring new approaches to finance risks, manage losses and improve the efficiency of their risk-transfer programmes as traditional insurance markets continue to evolve.
Captives allow companies to retain selected risks within their own insurance structures rather than relying entirely on commercial insurers. This can give organisations greater control over underwriting, claims management and the use of insurance capital.
A key focus is finding ways to optimise the balance between risk retention and risk transfer. Captive owners can use alternative financing structures to manage volatility, improve predictability of insurance costs and retain more value when claims experience is favourable.
Captives can also provide greater flexibility in responding to risks that may be difficult or expensive to insure through conventional markets. This is particularly relevant for emerging exposures where commercial insurance capacity may be limited or pricing may not adequately reflect an organisation’s individual risk profile.
However, greater retention also means that captive owners must maintain adequate capital and robust claims-management capabilities. Effective actuarial analysis, loss forecasting, reserving and governance therefore become critical components of captive risk financing.
The changing approach also reflects the broader development of alternative risk transfer, with companies increasingly considering structures beyond conventional insurance policies to address complex and volatile exposures.
For risk managers, the growing use of captive structures highlights the importance of evaluating insurance not simply as a cost, but as part of a broader risk-financing strategy that combines retention, transfer and capital management.
