State of the Industry: Top Challenges and Trends for Insurers and Reinsurers

A recent Verisk survey of insurance and reinsurance professionals revealed the top challenges and biggest opportunities the industry is facing after two consecutive years of underwriting losses.

The big picture: (Re)insurers continue to face macroeconomic uncertainties against the backdrop of significant technological advancements that have the potential to transform the industry. The survey revealed:

• The top concerns and priorities for insurers and reinsurers revolve around keeping pace with rapidly advancing technology.
• Nearly one-third of respondents said keeping pace with technology was the top challenge their organization is facing.
• However, realizing the substantial impact of technology investments can take time, especially as insurers cautiously navigate evolving compliance regulations.

Deeper dive: Check out the full results and insights by downloading State of the Industry: Top Challenges and Opportunities Facing the P&C (Re)Insurance Industry.

Here are some other key takeaways from the report.

The AI maturity curve

Doug Caccese, Co-President, Underwriting Solutions

Much like other industries, insurers are actively investing in and implementing artificial intelligence-based innovations. Yet, most insurers and reinsurers in our survey haven't experienced transformative impacts from the technology so far. There are two primary reasons for this:

• Many insurers are adopting AI in specific areas and not overhauling their systems, so they're realizing incremental improvements rather than transformative change.
• AI and generative AI have inherent risks, and insurers are proceeding with caution, especially as the regulatory landscape around the technology takes shape.

As technology evolves, interest in AI and GenAI remains extremely high. Respondents ranked GenAI as one of the top emerging technologies they are interested in. As insurers continue to expand their use of AI, with a focus on privacy and fairness, they will likely realize more of its potential over time.

A close eye on regulation

Saurabh Khemka, Co-President, Underwriting Solutions

Last year was an active year for privacy legislation in the U.S., with more comprehensive privacy bills passing in states than the previous five years combined. This trend may be one of the reasons that data privacy is the top regulatory issue insurers are concerned about, according to our survey.

One of the potential drivers of this increasing regulation is AI and GenAI. While these technologies come with a number of risks, proper governance and protocols along with ethical AI policies and procedures can help mitigate those risks. Of course, in a complex and ever-changing regulatory environment, data privacy is just one of several issues insurers need to monitor. That's why it's critical for carriers to have the proper tools to stay on top of all legislation that can impact their filings.

Responsible innovation, greater insights

As insurers and reinsurers navigate these challenges, Verisk is investing in high-quality data and intelligent automation on behalf of the industry to help it effectively manage risk and elevate customer experiences. We're committed to responsible innovation by enhancing and enriching datasets, delivering greater insights and analytic capabilities, and connecting the ecosystem for greater efficiency.

Download the State of the Industry report today.