AI errors create new demand for insurance cover, says report
As artificial intelligence becomes more deeply embedded across business operations, insurers are witnessing growing demand for specialised insurance products that cover losses arising from AI-related errors, according to a report cited by Insurance Business Magazine. While AI is transforming decision-making, automation and efficiency across sectors such as insurance, finance, healthcare and retail, experts caution that these systems are not immune to mistakes, bias or unexpected failures.
The report highlights that errors in AI-driven underwriting, claims processing, credit assessment or automated customer decisions can lead to financial losses, regulatory penalties and reputational damage for organisations. In response, insurers are developing policies that address risks such as algorithmic errors, data quality failures, biased outcomes and system malfunctions. These covers are often being bundled with cyber insurance, professional indemnity and technology errors and omissions (E&O) policies.
Insurers note that unlike traditional risks, AI-related exposures are harder to quantify due to evolving regulations, opaque models and limited historical loss data. As a result, underwriting requires close scrutiny of governance frameworks, model validation processes, data controls and human oversight mechanisms.
With regulators globally increasing scrutiny on AI accountability and explainability, organisations deploying advanced AI systems are expected to seek insurance protection as part of broader risk management strategies. Insurers believe AI risk cover will become an essential component of enterprise insurance portfolios as adoption accelerates.
Munich Re unveils ‘Ambition 2030’ strategy to accelerate profitable growth
Global reinsurance major Munich Re has unveiled its long-term strategic roadmap titled Ambition 2030, outlining a clear focus on sustained profitability, disciplined growth and capital efficiency over the rest of the decade. The strategy is built around three pillars — outperform, outpace and outpeak — aimed at strengthening Munich Re’s leadership across reinsurance, primary insurance and asset management businesses.
Under Ambition 2030, the group targets an average net profit of more than €6 billion per year between 2025 and 2030, alongside a return on equity consistently above 14 per cent. Munich Re plans to leverage its risk expertise, pricing discipline and diversified business model to navigate increasing volatility from climate change, geopolitical risks and technological disruption. The reinsurer also emphasised the growing importance of data, analytics and artificial intelligence in underwriting and portfolio management.
Capital allocation remains a core focus, with Munich Re reiterating its commitment to shareholder returns through dividends and share buybacks while maintaining strong solvency. The strategy also highlights selective expansion in specialty lines and solutions-driven offerings, reflecting rising demand for complex risk coverage globally. Munich Re said Ambition 2030 positions the group to grow faster than the market while maintaining resilience across cycles.
Ethos launches Aflac supplemental cancer insurance on its digital platform
Digital insurance platform Ethos has partnered with Aflac to launch a supplemental cancer insurance product, expanding access to specialised health coverage through a fully online journey. The offering allows customers to purchase cancer insurance digitally, simplifying a process that has traditionally involved offline paperwork and agent-led distribution.
The supplemental policy is designed to provide lump-sum benefits to help cover out-of-pocket costs associated with cancer diagnosis and treatment, such as deductibles, travel, accommodation, and lost income. By integrating Aflac’s product into its platform, Ethos aims to make protection against critical illnesses more accessible, transparent, and easier to understand for consumers seeking financial resilience beyond standard health insurance.
The launch reflects growing demand for supplemental and gap-cover products in the US insurance market, driven by rising medical costs and higher deductibles in primary health plans. Ethos said the partnership aligns with its strategy of offering flexible, customer-centric insurance solutions through technology-driven underwriting and distribution. Aflac, known for its focus on supplemental health products, said the collaboration enables it to reach digitally savvy customers while maintaining the product’s core benefit structure and claims reliability.
Reinsurers face twin pressure of growth and margins in 2026: Autonomous
Global reinsurers are expected to face increasing pressure in 2026 as they attempt to balance top-line growth with the need to protect underwriting margins, according to a new analysis by Autonomous. The report noted that while reinsurance pricing remains elevated compared to pre-hard market levels, the pace of rate increases is slowing, even as loss costs, capital charges and operating expenses continue to rise.
Autonomous highlighted that reinsurers are being pushed to grow premiums to meet investor expectations, but doing so may require accepting higher risk or softer terms in certain segments. At the same time, inflation, climate-related losses, and rising claims severity are putting sustained pressure on profitability. The challenge is further compounded by increasing competition from alternative capital and insurance-linked securities, which could limit pricing power in selected catastrophe and specialty lines.
The report added that reinsurers with strong capital positions, disciplined underwriting strategies and diversified portfolios are better placed to navigate these pressures. However, those chasing volume growth without adequate pricing or risk controls could see margin erosion. Autonomous concluded that 2026 is likely to test reinsurers’ ability to strike a careful balance between expansion and resilience in an evolving risk landscape.
Mosaic raises Canada cyber insurance capacity to $25 million
Mosaic Insurance has increased its cyber risk capacity for the Canadian market to $25 million, strengthening support for businesses facing rising digital and cyber threats. The move reflects the growing demand for higher cyber insurance limits as organisations grapple with ransomware attacks, data breaches, business interruption and regulatory exposure.
The enhanced capacity will be offered through Mosaic’s cyber underwriting platform and is designed to serve mid-sized and large enterprises across sectors such as financial services, healthcare, manufacturing and technology. The insurer said the expansion is backed by robust underwriting discipline, advanced risk assessment tools and a selective appetite focused on well-managed risks.
Canada has witnessed a steady rise in cyber incidents, with increased sophistication of attacks and higher loss severity prompting insureds to seek broader and deeper protection. Mosaic noted that clients are increasingly looking for comprehensive coverage that combines higher limits with tailored policy wordings, incident response support and risk mitigation services.
By raising its cyber capacity, Mosaic aims to position itself as a long-term partner for Canadian businesses navigating complex cyber exposures. The insurer added that cyber remains a core growth area globally, driven by digitalisation, remote working and evolving regulatory expectations.
Hong Kong proposes legal framework allowing insurers to invest in cryptocurrency
The Hong Kong Insurance Authority has unveiled a draft legal framework that would permit the city’s 158 licensed insurance companies to invest in cryptocurrencies and related infrastructure assets—a first-of-its-kind regulatory blueprint in the insurance sector. The proposal, presented on December 22, 2025, aims to position Hong Kong as a leading financial hub for institutional digital asset adoption and broaden the investment universe for insurers beyond traditional stocks and bonds.
Under the draft framework, insurers would be required to hold 100% risk-based capital for any direct holdings of volatile assets like Bitcoin and Ethereum, meaning they must reserve an equivalent amount of working capital for each dollar invested in these digital assets. This high capital charge classifies cryptocurrencies as “capital-intensive” but provides clear regulatory guidance for insurance investment in digital assets.
Meanwhile, stablecoins—especially those regulated in Hong Kong—are likely to receive more favourable treatment, with risk fees tied to the fiat currencies they are pegged to, lowering barriers for insureds to use regulated digital dollars for liquidity and payments.
The framework is currently in a feedback stage, and a public consultation is expected between February and April 2026, giving insurers and stakeholders an opportunity to shape final rules on risk weightings and eligible asset classes.
