Insurers’ underwriting capabilities are being restricted by organisational constraints, with just 8% of property casualty insurers regarded as underwriting “trailblazers”. This is amongst the conclusions of Capgemini’s latest World Property and Casualty Insurance Report, published this week.

Leveraging AI-driven insights and automation to make informed decisions and accurate risk assessments, P/C frontrunners are driving greater collaboration and customer transparency by keeping underwriters at the heart of all decisions, according to the report. It says 42% of policyholders find the current underwriting process complex and lengthy; and that 27% of policyholders switched providers in the last two years in search of lower premiums (60%) and better coverage (53%).

While premiums have increased, underwriting practices have struggled as combined ratios breached 100% sparked by nat cats; evolving risks due to technology innovation such as cyber threats; and emergence of generative AI and regulatory complexity.

“Today’s insurer is operating in one of the most precarious environments in recent memory. The industry must react to this volatility by rethinking the underwriting rule book,” said Adam Denninger, global insurance industry leader at Capgemini. “It requires shifting away from legacy models by modernising core systems and deploying advanced technologies that drive better outcomes and transparency. Embracing AI-driven insights and automation is crucial for the industry to drive a competitive path towards underwriting profitability that adapts to evolving risk dynamics and policyholder behaviours.”

Capgemini’s report draws from its 2024 Global Voice of the Customer Survey (of 3,323 P/C insurance customers in 16 countries across the Americas, Europe and Asia-Pacific); the 2024 Global Insurance Executives’ Survey (insights from interviews with 294 senior insurance executives of P/C insurance companies across 15 countries), and the 2024 Global Insurance Underwriters’ Survey (interviews with over 200 insurance company underwriters across seven markets).

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