Reinsurers have been told they cannot believe the utopian hype which has been created around  the use of artificial intelligence by the sector.

Jerad Leigh, (pic) co-founder and CEO of reinsurtech, Supercede, said the year ahead will be one of test and opportunity for reinsurers when it comes to technology.

On the upside he said brokers will feel the benefits.

“Historically, brokers have focused their technology efforts on building powerful analytics engines, tools to help evaluate and interrogate portfolios and software that determines the most effective use of capital for a cedent,” Leigh explained. “All of that is essential work and leverages the unique expertise and positioning of the reinsurance brokers; however, it’s also work that’s done behind the scenes and within the walls of the broking house.

“The experience for cedents has been to send data to their brokers, wait for a few days or weeks, and then be presented with a summary and a strategy on how they should approach the upcoming reinsurance purchases.

“But as cedents become increasingly technical – powered by their own innovation efforts – they’re demanding that they be included more in this process and treated as an active collaborator.”

He added every challenger broker that the company has spoken with has set goals of being more cedent-friendly, collaborative, and easy to work with. They see the need to meet the cedents where they are and build collaboration into their core value proposition.

“Leaders of challenger brokers have come from the big two; they have seen where those solutions have been positioned and know first-hand the size of the opportunity if they focus on finding ways to get closer to their clients,” continued Leigh. “But they also know that cedents don’t want countless different portals or ways to work with each broker. They’re leaning into solutions that are designed to be collaborative and that their cedents are already using. And they’re seeing it unlock opportunities to win new clients and grow their business with existing clients.

“Cedent-centricity and cedent-collaboration will be a key theme for 2026.”

He added: “AI is the hottest game in town and, if even part of its potential is realised, could have a transformative impact on the reinsurance industry. However, AI project failure rate within large enterprises has shown to be as high 95%.

“There are myriad reasons why this failure rate is so high but the simplest common thread would be the abandonment of first principles – teams and businesses losing focus of the core problem they’re trying to solve.

“This problem is more pronounced with AI because it’s easy to get caught up in the utopian future state that we’re promised. That problem will be especially true with reinsurance. With heaps of messy data, complex and nuanced contract terms, and the dynamic nature of the reinsurance purchasing process, it’s no wonder that we’re taken by the dream of an AI-powered universe that makes it all ‘easy’. But that utopia is a fiction. Especially if we try to go directly to that promised land all at once.”

Leigh added: “For AI to have a meaningful, real-world impact on business, cedents, brokers and reinsurers will need to start with hyper-specific use cases and select AI solutions that can help them prove out that value. If successful, they can move on to the next area; rinse and repeat.

“If companies maintain their first principles and start small, they can see meaningful value delivered through AI. If they don’t, they could see a sizeable investment vanish with nothing to show for it.”

He highlighted PwC’s BMR Pressure Index, which tracks early signs of stress on business models, places re/insurance as the second-highest industry experiencing reinvention pressure. This ranking is being driven by compounding risks such as climate change, cyber threats, and geopolitical instability.

“However, the challenges facing the reinsurance market in 2026 aren’t anything new,” said Leigh. “Changing market conditions, complexity of understanding new risks, adverse developments in macroeconomic trends, and shifting capital requirements are all par for the course for the industry that has been the cornerstone for the insurance industry for centuries.

“Navigating challenges is the default position and our industry has always remained resilient.”