Lemonade and Tesla give telematics a new application.

In 2026, personal lines insurers will face a market reshaped by changing demand, risk, and consumer expectations. Growth hinges on smarter digital engagement, genAI transformation, richer data, real-time risk insights, and emerging coverage areas.

The finding: Interest in electric vehicles (EVs) has ticked up in the past year, per Deloitte’s June 2025 ConsumerSignals report. Globally, 44% of consumers said they would prefer an EV for their next vehicle, compared to 39% one year ago. In the US, 37% of consumers want an EV, up from 34% in June 2024. The rise in EV demand marks a fundamental shift in the risk landscape. Insurers can no longer afford to underwrite EVs as they would a regular car and adjust premiums reactively. Instead, they must move to a proactive model. This will include incentivizing safe driving, and educating consumers about their vehicles and how to keep premium prices as low as possible. Next, insurers should consider acquiring cybersecurity insurance, investing in human-centric security, and implementing advanced security technologies.

P&C insurers haven’t seen a market as hard as this one for a generation. Those willing to rework their business model from a reactive to a more proactive approach stand a better chance of returning to profitability.

Rapidly shifting customer expectations, disruption from new entrants, and new risks and coverage needs threaten to turn the property and casualty (P&C) insurance industry on its head. But insurers that digitally transform can come out on top.

Usage-based insurance (UBI) products appeal to consumers who prefer customized services, and their success is attracting droves of new entrants to the UBI arena.

Telematics is becoming the norm in US auto insurance as drivers increasingly agree to being monitored in exchange for lower premiums.

Connected vehicles are changing how people think about mobility. They also have important implications for marketers, who are experimenting with ways to tap the data they produce to engage consumers and drive new revenues.