Driven by increasing competitive pressure, market softening and rapid advances in AI, four in 10 insurers are now using artificial intelligence in underwriting, a move that marks a key stage in their digitalization, new research from Sollers Consulting shows.
Underwriting automation is quickly becoming a strategic priority for insurers in all major markets. This marks a turning point for functions that have historically lagged behind management and distribution in terms of digitization.
The proportion of insurance IT jobs requiring specific underwriting expertise will double by 2025, expanding faster than any other specialization in the industry.
According to Sollers’ research across 10 markets, there are currently 126 active AI use cases in insurance, 13 of which are specifically focused on underwriting.
Although this is a small percentage relative to the claims business, this area is expanding rapidly.
The most significant progress so far is in the commercial insurance space, with one in five providers using AI to process data in unstructured documents and classify incoming submissions.
Jakub Śliwiński, Head of Underwriting at Sollers, commented: “Underwriting was the last major function to go digital, and the pace is changing rapidly.
“We are already seeing AI support the classification of submissions and help underwriters generate quotes faster and more consistently in a standardized way. Scaling this to more complex, smaller risks will take another one to two years as the necessary data foundation first needs to be established.”
Currently, the impact of AI on underwriting remains uneven, focusing primarily on receipt of submissions and document processing rather than pricing and risk selection.
That balance is likely to change as insurers expand digital initiatives and introduce underwriting workbenches that more tightly integrate pricing models and user interfaces, the report said.
To scale these systems beyond their initial committed volumes, organizations will require a fundamental redesign of IT and business architecture, as well as careful change management.
In the short term, insurers are placing a legitimate focus on portfolio analysis and data aggregation. Solers noted that using AI to gain near-real-time visibility into portfolios containing highly customized contract terms solves a major operational hurdle.
This is becoming increasingly important for regulators, while freeing up underwriters’ capabilities without changing core risk selection.
Accelerating developments in underwriting technology also reveal unique regional trends in global insurance hubs:
The London insurance market is currently leading the global transition away from reliance on traditional spreadsheets, the report said. Companies in the region are prioritizing the implementation of adaptive pricing platforms that are directly connected to their core underwriting infrastructure.
In Australia, pricing and underwriting modernization has become a priority following a series of mergers and acquisitions, leading at least one prominent insurer to embark on a comprehensive digitization of its commercial underwriting processes.
North American insurance companies are increasingly expanding their use of artificial intelligence beyond personal lines to complex commercial risks.
In the wider UK personal and business market, as well as in France and the Nordic countries, the focus is on data integration and interoperability – the overarching foundation for enabling automation.
Finally, Poland and Central and Eastern Europe are the fastest moving from pilot to production-ready phases for automated pre-screening and OCR-driven document processing.
