Recently we explored how specialty insurance markets emerge and the signals that help MGAs distinguish a lasting opportunity from temporary interest. Now we’re looking at where those signals are appearing today, and which markets may be primed for early entry.
Predicting the next specialty market is not a science, but promising candidates tend to share several characteristics:
- Growing commercial demand
- Recognizable loss scenarios
- Defined risk controls
At the same time, traditional underwriting remains constrained by limited historical data, inconsistent standards, or a shortage of specialized expertise. By those measures, we’ve identified three potential markets that we believe deserve attention: artificial intelligence, battery energy storage, and carbon credits and removal projects.
Artificial intelligence: A risk that crosses existing lines
AI is the most visible candidate for the next significant specialty market, but it is also one of the most complicated.
The problem is that AI is not a single exposure. A tool that helps employees draft email content presents a very different risk from a system that provides professional advice, makes employment decisions, approves financial transactions, or operates physical equipment. Since AI is more of an umbrella for a wide variety of applications across industries with varying levels of risk, it makes insuring that much more difficult. Losses may affect several existing lines of business. The list is seemingly endless in this regard: a biased hiring tool might trigger an employment practices claim, a compromised model could create cyber exposure, or an autonomous vehicle could cause bodily injury and property damage.
The market has not reached a consistent answer for insuring these risks, but specialist coverage is emerging: Armilla, an AI-focused MGA and Lloyd’s coverholder, launched affirmative AI liability insurance in April of 2025. This development suggests a market that is beginning to distinguish between affirmative AI coverage, explicit exclusions, and potentially silent AI exposure within existing policies. It’s a sign that growth potential is being detected, even if the complexity has yet to be completely ironed out.
For MGAs, the opportunity lies in determining which characteristics influence the likelihood and severity of loss. These may include the decisions a system can make, the degree of human oversight, the quality of testing and documentation, the use of third-party models, and the organization’s ability to identify and respond to failures. Risk-management guidance is also becoming more useful. NIST released its Generative AI Profile in 2024, giving organizations a structured approach to identifying and managing risks specific to generative AI. Frameworks like this can help underwriters translate broad concepts such as governance, testing, transparency, and monitoring into more consistent underwriting questions.
The long-term market likely will not become one standardized AI policy. It may develop through coordinated cyber, professional liability, product liability, intellectual property, and affirmative AI coverage. MGAs with technical expertise could help define those boundaries—and distinguish responsible AI deployment from poorly controlled exposure.
Battery energy storage: Rapid growth meets physical risk
Battery energy storage systems, often called BESS, store electricity for use when demand rises, generation falls, or the power grid requires additional support.
With an ever-increasing population, severe natural disasters throughout the year, an aging energy infrastructure, and the energy resources required to power AI technology, their deployment is accelerating quickly. According to the International Energy Agency, battery storage was the fastest-growing power technology in 2025, with approximately 108 GW of new capacity deployed worldwide, up 40% from 2024.
That growth is being accompanied by increased risk exposure, and an opportunity for specialized expertise.
Battery projects can create property, construction, equipment breakdown, business interruption, environmental, cyber, and third-party liability risks. Fire and thermal runaway (occurs when a battery cell short circuits and heats up uncontrollably) receive considerable attention, but the complete exposure also includes faulty installation, battery management system failures, supply chain delays, contractor quality, and the difficulty of replacing specialized equipment. These factors make battery storage challenging to fit into broad renewable energy underwriting models. Two facilities of similar size can have very different risk profiles based on cell chemistry, manufacturer, system design, component spacing, fire protection, operating procedures, and local emergency-response capabilities.
This is already creating a role for MGA expertise. In 2024, NARDAC, a specialist energy and infrastructure MGA, announced dedicated underwriting capacity for battery-storage projects. Its approach considers evolving battery chemistries, management systems, cabinet energy density, digital monitoring, and other technical variables. This move illustrates that there is an opportunity for MGAs to identify which engineering and operational controls meaningfully reduce exposure. Specialists that combine technical knowledge with disciplined data collection can help create more consistent underwriting guidelines, coverage terms, and risk-management expectations.
Battery storage appears to have several signs of an emerging market moving toward maturity: sustained demand, a rapidly expanding asset base, identifiable loss scenarios, and measurable differences between higher and lower risks. The MGAs that understand those differences may help create the underwriting foundation for broader participation and as a result find themselves at the helm of a growing market.
Carbon markets: Insuring environmental promise
Carbon credits and carbon-removal projects represent an earlier stage of opportunity.
These markets direct funding toward projects intended to reduce, avoid, or remove emissions. Projects can include forestry, ecosystem restoration, and engineered carbon-removal technologies. Buyers may purchase credits immediately or agree to buy credits that a project expects to produce years in the future. Naturally, this dynamic creates several risks:
- A project might fail to deliver the expected credits.
- Previously issued credits could be invalidated.
- Stored carbon could be released by wildfires or another event.
- Fraud, changing verification methods, or political action could affect credits.
Specialty insurance is beginning to address these exposures. Marsh reported in 2026 that the market now offers solutions for invalidation, carbon reversal, political risk, and non-delivery. The firm described insurance as helping make carbon projects and long-term purchase agreements more dependable for buyers, lenders, and investors.
For MGAs, carbon underwriting may require expertise in environmental science, natural catastrophe risk, project finance, verification standards, regulation, and contractual obligations. The underwriting variables will also differ by project type. Forestry projects, for example, face different permanence and monitoring risks than engineered removal facilities. This market is young, and its development depends on greater transparency and standardization, but it also demonstrates how insurance can help an unfamiliar asset class build confidence. MGAs that can evaluate project quality, verification methods, delivery obligations, and potential causes of failure may help determine which risks can support scalable coverage.
MGAs help define what becomes insurable
AI, battery storage, and carbon markets are very different exposures. What connects them is their stage of development—niche but maturing rapidly. Commercial activity is advancing quickly; demand is visible, but historical data remains limited. Controls and standards are emerging, but they are not applied consistently either from a lack of cohesion among the market or a lack of understanding.
This is where MGAs have traditionally created value. The opportunity is not to make bold predictions or rush into every new risk, but to ask better underwriting questions, develop specialized knowledge, and identify the characteristics that make an unfamiliar exposure measurable or more predictable.
Not every emerging risk will become a sustainable specialty market, and there is a risk in pursuing these opportunities. However, the specialists that understand these risks and establish themselves early may help shape the coverage, underwriting discipline, and market confidence that determine which ones do. Of course, they would also stand to benefit from that market’s success if taking the risk pays off.
Pursuing emerging specialty markets requires MGAs to move quickly without sacrificing underwriting quality. That means a lean team, efficient operations, insightful data analysis, and solutions that empower strategic decision-making. With deep insurance expertise, purpose-built AI solutions, and long-standing partnerships with top MGAs, Vertafore's specialty insurance software helps MGAs work smarter, adapt faster, and create stronger foundations for sustainable growth.