Commercial lines has historically lagged personal lines in embracing technology; the sector is complex, relationship-based, and slow moving. Yet business processes are digitizing, meaning more data is accessible and relationships are augmented (rather than replaced by) technology. Commercial carriers are turning their attention to leveraging technological investments effectively as a result.
Growing the book of business is a primary objective for commercial insurers. Commercial lines carriers are investing most heavily in distribution, across digital, data, and core. They are differentiating themselves through improvements to distribution management, expansion into new geographies, and growing underwriting appetite. Product innovation and service improvement are additional focus areas.
Carriers are intent on maintaining underwriting discipline as they grow their books. More carriers are using new data sources combined with AI, predictive analytics, and business rules to align pricing actions with risk quality. This process is helping carriers apply underwriting expertise consistently and make better underwriting/pricing decisions. Insurers are also automating workflows to improve consistency and efficiency, in some cases using robotic process automation (RPA).
Beyond underwriting, data initiatives are becoming common to improve pricing techniques and expand modeling to manage catastrophe exposures. Carriers are overlaying weather data and exposures on maps to identify claims as eligible or fraudulent. Data is also helping improve services while lowering loss costs, reducing claims expenses, and gaining additional data.
These market dynamics are leading insurers to prioritize investment in business intelligence, claims, policy administration, and agent and customer portals. More information on trends and challenges in the commercial space is available in Novarica’s recent report, Business and Technology Trends: Commercial Lines.
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