The commercial insurance producer of the future

• Serve as “extra hands” to generate submissions that are tailored for all stakeholders – that is, reflecting client risks to fill gaps in carrier’s offerings and suited to carriers’ processes to make it easier and faster to assess and price risk accurately. Automating data capture will eliminate inefficient, low-value and unnecessary back-and-forth client communications. GenAI can also provide insights into the leads and opportunities most likely to convert, enabling brokers to boost their win rates by up to 40%.
• Promote better placement by improving the consumption of appetite changes and altering interaction models for more efficient communication with carriers.
• Auto-populate data and forms for key workflows to accelerate the management of claims, renewals and other core services processes. GenAI tools can function as copilots, presenting key information, which producers can enhance and refine to accelerate closures. They can also route incoming calls and routine service requests for tailored, real-time resolutions. The automatic creation of knowledge content will satisfy customers who prefer to use self-service portals.
• Provide insights into the types of clients to pursue via digital marketing campaigns and which channels to engage them. It can streamline the production and delivery of individualized content based on prospects’ preferences and intent and where they are in the funnel.
• Accelerate quoting via complete, accurate and standardized data delivered in submission forms and increase precision in pricing for improved quote-to-bond ratios, which benefits all stakeholders. With no need to rekey data, renewals will also happen faster, boosting retention rates.

*SOURCE: EY analysis

GenAI will transform the role of brokers, but it won’t replace them. Indeed, the most effective deployments of GenAI will feature humans in the loop. Though basic tasks for initial submissions will be handled primarily by bots and copilots, producers or their staff will still review them and validate their accuracy. It’s analogous as to how staffing services use GenAI to sort through massive numbers of resumes to find those that are best suited to specific jobs and companies, which are then routed to and reviewed by human resources professionals. Claims management processes will also be AI-enabled, but broker workflows will be integrated to keep producers informed of claims payments. Combining human savvy and AI’s firepower will emerge as a leading practice among top performers and market leaders.

On the strategic front, brokers, advisors and other producers will have more detailed conversations with clients who expect tailored insurance programs and strategic risk management guidance, based on their sector and unique operating footprint, risk profiles and business strategies. With GenAI greatly reducing their administrative burdens, producers can focus on these high-value discussions. Further, they can increase their knowledge of discrete industries, types of coverages or exposures, to take advantage of the general trend toward increased broker specialization. The more brokers know about their clients’ unique risks, the more empowered they will be to offer appropriate coverage extensions, alternative program design options, and packages of policies from multiple carriers, as needed.

All stakeholders benefit from product innovation. More efficient placement and more precise pricing result from well-designed products. Brokers get stronger client relationships and carriers can identify profitable niches to grow their business. This is a major improvement over the old-school model of choosing the least expensive coverage option from a few generic proposals.

Soon, product innovation will become the rule, not the exception. In fact, we predict that 70% of insurers will proactively develop products to respond directly to customer needs, rather than moving reactively in light of client or broker requests or competitors’ actions. New offerings will also help reduce the amount of uninsured losses, which are an increasing strain on public resources with governments more frequently needing to step to backstop companies after natural disasters, massive data breaches and other loss events.

Refreshing and rationalizing existing product portfolios will help carriers and producers cut operating, business development and retention costs by up to 30%. When product portfolios are streamlined and easier to understand, producers will have a clearer idea of which carriers have the best products for which sectors and which types of companies. The net effect will be increased retention for both carriers and producers, even as the increased competition encourages specialization.

*SOURCE: EY analysis

As the insurance industry evolves, the regulatory landscape will, too. The current trend toward broader oversight of more parts of the business – including data privacy, consumer protections, cyber security and operational resilience – will surely continue. Producers need to stay informed about ongoing developments. In many cases, significant investments in new technology and meaningful process changes will be necessary to achieve compliance.

Only large organizations will thrive in such a complex and expensive regulatory environment. Smaller brokers will struggle with rising costs and the difficulties of delivering the information regulators expect. The restrictions about how consumer policies are sold and serviced will likely be applied to commercial markets soon. The General Data Protection Regulation (GDPR), the UK Consumer Duty, the AI Act in Europe and similar legislation in other jurisdictions, the California Consumer Protection Act (CCPA), and rules from the New York Department of Financial Services will all require more detailed reporting. In some cases, authorities are looking for validation of specific outcomes (e.g., that products deliver the promised value to customers). Changing tax laws will present yet another challenge.

Faced with a heavier regulatory burden, many small and mid-sized firms will be forced to sell themselves. In fact, we expect a doubling of current rates of mergers and acquisitions (M&A) within the broker community. For larger firms, M&A can expand the customer base and provide access to experienced talent. But seamlessly integrating the people and technology operations from acquired entities can limit returns on M&A investments, especially for those firms with outdated and rigid legacy systems, such as those in place at many brokerages and agencies.

Technology and data

Increased connectivity among all stakeholders holds the key to delivering better outcomes across the industry. For producers, that means increasing investment in core systems. For carriers, one priority will be providing risk appetite and underwriting guidelines in a form easily consumable producers’ systems in near real-time.

• Establish the necessary infrastructure to automate data feeds and promote collaboration through extensive data sharing.
• Harden technology platforms to protect client data against unexpected release by cyber criminals.
• Explore GenAI alternatives to improve the efficiency of submission processing by producers and underwriters.

Talent, people and culture

Tech-savvy talent and high-performance cultures will be difference makers for both carriers and producers in the age of AI.

• Conduct a thorough assessment of current skill sets and map them to future needs.
• Seek external partnerships that can provide access to scarce knowledge.
• Refine the organizational model to support new ways of working and facilitate collaboration.
• Closely monitor industry trends and track preferences for compensation, benefits and the overall employee experience.

Products and services

Innovation is increasingly a team sport in commercial insurance, with clients, producers and carriers likely to collaborate on tomorrow’s most promising solutions, including on the development of captives for the largest corporations.

• Regularly review all offerings to keep the product portfolio up to date and rigorously cut products no longer attuned to market needs.
• Conduct regular market research and customer surveys to identify emerging needs and fuel the innovation pipeline.
• Embrace GenAI-enabled tools to scan the market for underserved segments and shifting risk appetites.

Regulatory and risk

Reporting and other requirements will only get more strenuous in the coming years but can prompt innovation when incentives are aligned.

• Look for opportunities to generate business value (e.g., more efficient processes) from necessary compliance investments.
• Engage with regulators on the development of public-private partnerships for climate, cyber and other macro risks too big for any one stakeholder group to solve on its own.

Though the current commercial insurance landscape may seem turbulent, we believe the future is bright for those brokers and carriers that meet the moment with bold and creative action. Deploying the right technology in the right way can help them increase trust and transparency for stronger client relationships.

The path forward will not necessarily be straight or smooth. Climate, cyber and other emerging risks represent significant challenges, and will only grow more complex and threatening. Competition will only intensify. But AI-enabled and data-driven techniques for identifying and assessing exposures and more precisely pricing risk create opportunities for innovative products and solutions.

Those commercial insurance businesses that embrace the opportunities and make the necessary investments stand to unlock breakthrough growth by delivering unprecedented value to their clients. Looking ahead, it’s a win-win-win for carriers, producers and their customers – those businesses looking for smarter and more customized protections against the unique risks they face today and will face in the future.