The growing threat of interconnected risks will test insurers and their clients in the year ahead.

Gregory Marchat, global head of financial services, at Forvis Mazars, has highlighted the top risks for financial services firms over the coming year and the growing merger between risks which have in the past been seen as siloed is a core concern.

“As we begin 2026, financial services firms must realise that the risk environment they face is becoming more interconnected, fast-moving and difficult to manage in silos, especially in light of the recent geopolitical tensions which pose challenges,” he added. “Macroeconomic uncertainty continues to shape strategic decision-making, while rapid technological change is expanding both opportunity and vulnerability across the sector. These themes closely align with the Bank of England’s Financial Stability Report 2025, which highlights the growing complexity, interdependence and potential amplification of risks across the financial system.”

Marchat continued: “Cyber security and financial crime remain critical priorities as threat actors become more sophisticated, increasing the need for stronger controls, better use of data and clear accountability at senior levels. At the same time, regulatory expectations are intensifying, with supervisors placing greater emphasis on governance, culture and demonstrable outcomes rather than box-ticking compliance.”

“For global financial institutions in particular, regulatory divergence is emerging as a severe and increasingly difficult risk to manage. As jurisdictions pursue different supervisory priorities, timelines and rule interpretations, firms operating across borders face rising complexity, higher compliance costs and the risk of fragmented control frameworks. Critically, divergence has the potential to materially affect global operating models and strategic decision-making.”

“Operational resilience, including firms’ reliance on third-party technology providers, is also firmly in focus, reflecting the Bank of England’s warnings on concentration risk and the potential for disruption to propagate rapidly across the system. Alongside this, climate and sustainability risks continue to influence balance sheets, disclosures and long-term strategy, while persistent skills shortages in technology, risk and compliance are becoming a defining constraint on firms’ ability to respond effectively.”

He concluded: “The firms that will be best positioned for the years ahead are those that recognise these risks as connected and treat strong governance, risk culture and resilience not simply as regulatory requirements, but as strategic assets that underpin trust, stability and sustainable growth.”

Marchat’s comments came as new research found that UK and London market underwriters are to invest in automation and AI to boost operational efficiency and underwriting precision.

The prediction comes in the Sollers Prediction Report 2026 which said IT integration will be key as the UK insurance industry continues to navigate sustained rating pressure, elevated loss levels and persistent claims inflation.

It added in the year ahead digitally advanced carriers will be widening the performance gap leveraging technology for efficiency gains, while fast follow strategies are gaining traction as organisations replicate proven innovations to accelerate delivery and reduce transformation risk.

On the technology front, Sollers said insurers are prioritising modernisation of core infrastructure and the consolidation of Policy Administration System (PAS) landscapes. Many are replacing spreadsheet-heavy processes and addressing longstanding integration gaps, adopting Blueprint Two compatible core solutions and flexible pricing platforms that integrate natively with underwriting systems.