The past year has been a whirlwind of precedent-setting and shifting moments that continue to impact companies in the retail and distribution industry. Despite these challenges, businesses have demonstrated remarkable resilience, adapting to ongoing changes in their operational models, supply chains and financial outlooks. As we approach and eventually enter 2026, retailers and distributors should remain prepared to confront a wide range of current and emerging risks and challenges, shaped by the events of 2025. While you review these notable risks for 2026, remember that Willis, a WTW business, is here to support you and your organization with confidence and a specialized approach tailored to your unique circumstances.
01
With elevated interest rates and a slowing economy due to shifting trade and fiscal policies, businesses should expect to continue monitoring and adapting to both sudden and gradual changes that may impact their financial outlook. Although there are signs of inflation waning (lower short-term debt rates and increased consumer spending); the economy is still a top challenge. Ongoing trade negotiations between the United States and countries around the world could result in varying degrees of tariff impact, making it wise to be prepared for a range of possible scenarios. Despite these challenges, our experts predict a softening trade credit insurance market for 2026, with highly competitive pricing for new insureds entering the market.
02
With heightened tensions in places like Nepal, Nigeria, parts of North Africa and the Middle East, and increasing Chinese influence globally, retailers and distributors in North America may face disruptions, increased business costs and potential temporary shifts in operations from certain markets. Coupled with the upcoming midterm elections in the United States and other risk factors such as the spread of political misinformation, rising nationalism and protectionist policies, organizations should prepare for a hardened political risk market. However, our experts have observed that some insurers are gradually adopting more flexible stances for multi-country programs. On a related note, certain crisis management-related lines are showing stable market capacity and rates, with insurers adapting their coverage language to address evolving risks.
03
With the growing prevalence of artificial intelligence (AI) and more sophisticated cyber breaches, retailers and distributors should be proactive in maintaining robust technological hygiene within their operations and implement policies to protect data and secure information. An emerging risk to watch is the use of AI to create fake audiovisual assets of leaders and other well-known individuals, which can spread offensive or harmful messages. These "deepfakes" can damage a business’s brand and intellectual property, tarnish a leader’s reputation, or even put employees in harm's way. Despite these challenges, our experts have observed a stabilizing cyber insurance market, and the overall D&O market remains competitive with ample capacity.
04
As previously mentioned, the trade conditions faced by retailers and distributors can significantly impact operations, influencing where businesses choose to import from and export to. This complexity makes it challenging to forecast accurate quarterly projections and determine where to focus growth efforts. At the same time, several ongoing events continue to impact how retailers and distributors navigate supply chain and logistical challenges:
Given these challenges, our experts have observed a softening marine cargo market and carriers are looking to expand their appetite for environmental coverage to better meet the evolving needs of their clients.
05
With economic conditions expected to gradually decline into 2026, we anticipate a resurgence of retail-related crime and its impact on both property and employees, similar to what was observed during the peak of the COVID-19 pandemic. While many businesses have implemented measures to deter such incidents, these efforts have often been criticized for making the customer experience tedious, cumbersome and off-putting. Moving forward, retailers will likely face the challenge of balancing the need for secure and safe storefronts with the goal of maintaining a positive experience for customers and guests alike. To gain insights into what to expect from related insurance lines, read our extensive property and casualty market insights in our 2026 Insurance Marketplace Realities.
06
A multitude of recent events impacting retailers and distributors, their employees, and their families are expected to continue into 2026. Most notably, these include ongoing immigration enforcement, increasing costs of health insurance coverage and challenging economic circumstances. The "Great Stay" is likely to persist in some parts of organizations, while other areas may face shortages or difficult recruitment experiences due to these conditions. Accordingly, our experts anticipate a competitive employment practices liability market, with a rise in claims and adjustments in some jurisdictions.
As we enter the second half of the 2020s, our team of experts at Willis, a WTW business, are eager to help your organization confront these risks and more. Our specialized approach to risk management has consistently delivered value to our clients, and we are confident that our support will enable you to overcome challenges and enhance your operations. If you would like to learn more about how we can assist you and your organization in navigating the risk landscape of 2026, please reach out to a trusted Willis colleague or contact us here today.
WTW hopes you found the general information provided here informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, WTW offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).
