Commercial lines underwriting performance will continue to be a boon to P&C insurers in 2025, but this once-predictable sector is undergoing seismic shifts. Today, carriers face mounting pressure to reduce exposure to new and evolving risks, reduce costs, align with changing customer needs, and drive new growth.
According to McKinsey’s 2025 Global Insurance Report, top-performing carriers are making focused investments in modernizing underwriting by embracing advances in AI and other technologies. They’re also setting clear strategies for identifying and capturing profitable growth. But for many commercial lines underwriters, disjointed data systems and cumbersome manual processes leave them unable to accurately and efficiently select and price risk relative to appetite. To remain competitive, carriers will need to implement strategies to overcome this challenge and navigate this evolving market.
The Shifting Commercial Lines Landscape
As businesses diversify, their insurance needs grow more complex. This makes fast, accurate risk assessment increasingly challenging. According to Capgemini, 54% of insurance industry executives cite insufficient access to data as a top operational challenge. With meager access to data-driven insights, 77% of insurers struggle to achieve pricing precision. As coverage needs grow more complex, they risk mispricing, which can erode or threaten profitability.
What’s more, many carriers manually triage new broker submissions using complex underwriting rules. This is in part because business needs and the insurance products to support them are more complex than their personal lines counterparts. In commercial lines, a lot rides on personal relationships, along with a high level of service accuracy and competency from the earliest stages of the submission process.
But many commercial lines carriers report broker submissions are coming in faster than underwriters can triage and process them. For many, this challenge is only exacerbated by an inability to access the data and intelligence needed to assess complex submissions and understand whether they represent acceptable risk. As it stands, 41% of underwriters’ time is spent on administrative and operational activities instead of underwriting. For this reason and more, Capgemini predicts that 2025 will see commercial lines underwriters prioritize investments in cutting-edge underwriting platforms and high-speed pricing capabilities.
That’s good news. In one recent survey, commercial lines underwriters reported that only about 25% of submissions turn into written policies. Currently, as much as 60% of submissions never get reviewed at all. This is compounded by the fact that commercial lines underwriters must typically interact with between five and 15 different systems daily to complete their tasks—creating inefficiencies that increase both the time and effort required for submission triage, risk assessment, and pricing. But it doesn’t need to be this way.
AI and Automation: Keys to Transforming the Submission Process
The technology exists today to transform commercial underwriting from time-consuming, error-prone manual processes to proactive, data-driven operations that enhance the underwriters’ ability to protect customers and positively impact carrier results. AI-enabled predictive analytics, for instance, can unlock insights from vast structured and unstructured datasets to identify patterns and predict future losses with unprecedented accuracy. This allows underwriters to price risks precisely while reducing the likelihood of costly errors.
Meanwhile, generative AI can work as an underwriting assistant to review incoming submissions—including applicant input, ACORD forms, loss-run reports, spreadsheets, custom forms, photos, and more—against underwriting guidelines to assist in determining risk eligibility and help ensure only viable submissions progress to the quoting stage.. AI can also help scale new risk parameters for new business classes or lines that would otherwise entail significant IT and programming requirements.
Combined with automation technologies, these and other technologies can be leveraged to streamline the critical early stages of underwriting. This includes the potential use of autonomous, agentic AI capable of performing initial risk assessment and automating pre-clearance checks without supervision—dramatically reducing manual workloads and accelerating aggregate decision-making along the way. As FinTech Global reports, 50% of insurers plan to adopt agentic AI in the year ahead.
5 Strategic Imperatives for the Future of Commercial Lines Underwriting
Achieving this kind of technological prowess is no small feat. To fully capitalize on the benefits of AI, automation, and other technologies in core underwriting processes, carriers must be able to easily configure, manage, and automate specific operational processes for each of these states based on their unique criteria and risk appetites. For commercial lines insurers, this creates the following five imperatives:
-
- Adopt a Cloud-Based Infrastructure: The ability to access and leverage internal and external data requires a modern, cloud-based infrastructure such as the Guidewire platform. Focus on those that combine core, data, and digital using advanced artificial intelligence to leverage data and real-time analytics for faster, more accurate risk assessment.
-
- Leverage Next-Gen Data Sources: To improve underwriting accuracy, carriers must incorporate a wider array of nontraditional data sources that provide richer insights into risk. This can include insights from HazardHub (comprehensive property risk data on any commercial property), CoreLogic (property risk assessment for commercial properties), and others. According to Capgemini, 72% of commercial lines carriers see integration of such data as vital to improving underwriting precision.
-
- Prioritize Automation Across Pre-Bind Processes: By automating some or all facets of submission triage, initial risk assessments, and pre-clearance checks, carriers can significantly reduce the time and cost associated with these processes—freeing them up to focus on more complex submissions or activities that drive higher profitability.
-
- Ensure Process Flexibility: Carriers must ensure that their systems are flexible enough to manage, customize, and automate specific processes of each discrete state in the submission process—from new submissions to declines, quotes, binds, and renewals. This includes the ability to tailor automations based on carriers’ unique needs by line of business, segment, region, or any other variable relevant to their operations.
-
- Harness Insurtech Ecosystems: In addition to next-gen data providers, insurtech ecosystems give commercial lines carriers the ability to optimize many different aspects of underwriting when integrated to their core systems. This includes solutions like those from Tensorflight (a neural network-enabled desktop inspection platform for commercial properties), Indico Data (automated intake workflows for broker submissions), and others.
What the Future of Commercial Lines Looks Like
With rising risks, escalating costs, evolving customer needs, and mounting competition, leveraging modern technologies to accurately select and price risk and streamline the submission process may prove critical to commercial lines carriers facing a period of profound change. (For more about how such strategies can work, view the embedded video below.) Through the strategic application of next-gen data and analytics, AI, and automation technologies, carriers can navigate the challenges reshaping the future of commercial lines underwriting—and harness them to their competitive advantage. Watch the video below to learn more.