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AI urged as brokers face rising secondary peril losses and a soft market
Swiss Re says secondary perils drove 99.9% of North America’s $90 billion in natural catastrophe insured losses in 2025.
As Q3 2026 approaches, Zywave’s Jeff Cohen argues that complexity in insurance risks is growing, with policyholders increasingly pressing brokers on whether they need specific coverage and how much coverage they require. In that environment, Cohen says the broker’s role shifts from processing policies to acting as a trusted advisor that can translate changing risk into coverage recommendations, especially as loss patterns evolve.
Cohen highlights secondary perils as a major driver of insured losses. He cites Swiss Re’s May 2026 report showing secondary perils’ share of North America’s $90 billion in natural catastrophe insured losses hit an all-time high at 99.9% in 2025, with wildfires and severe convective storms producing the highest annual aggregate insured losses ever recorded from secondary perils in the region.
He also connects the changing loss landscape to broader market conditions. Cohen says a soft market across many lines is accelerating, narrowing spreads and condensing margins, which makes organic growth harder and raises the bar for how brokers use AI, arguing efficiency alone may not be enough when businesses need better client acquisition, cross-selling, and retention.
At an AI Executive Roundtable in New York City in June, Cohen reports that nine brokerage leaders from Top 20 firms were candid about challenges beyond implementation, pointing to adoption, data quality, and the need to prove ROI under pressure from stakeholders. He adds that insurance buyers are also using AI to evaluate the thoroughness of brokerage communications.