“The 2024 Global Insurance Underwriters’ Survey suggests that the ongoing presence of static underwriting is still dominant. This creates challenges across the underwriting value chain. Some of these challenges include data collection slowed down due to manual processes, lack of adequate risk assessment, making underwriters struggle to create policies that are priced fairly and competitively, and quote generation, where underwriters are unable to meet the changing customer demands.”

The Property and Casualty (P&C) Insurance Industry is undergoing tremendous change owing to unique challenges. It is transforming more rapidly than other Insurance sectors. This makes it easier to miss out on its macroscopic picture, especially if you’re involved with microscopic tasks within the P&C sector every day. If you’re wondering what’s causing this massive shift, there are several factors to sift and search, some of the key factors being:

• Increased Impact of Climate Change and Natural Disasters
• Technological Boom and Insurtech
• Cyber Risk Coverage Growth
• Emergence of New Risks
• Geopolitical and Economic Shifts
• Regulatory Pressures
• Customer Expectations and Personalization

These key findings are impossible to ignore, especially if you’re in the P&C sector for the long run. To make standing out in the P&C sector simpler, we’ve put in extensive research to dig out the whole truth that can simplify the P&C process and the road ahead, so that you or your agency are all geared up to put your best foot forward.

After extensive analysis and conversations with experts, our insurance experts have used the gathered data and insights to build a reliable framework for 2025, which not only brings guaranteed systematization to your P&C insurance operations, but also helps you establish your edge in the market where you’re competing with so many names, all trying to reach the same milestone. Let’s begin by trying to understand Property and Casualty (P&C) insurance the best we can.

Understanding P&C insurance

Property and Casualty (P&C) insurance, also known as General Liability insurance, can be seen as a broad category of insurance. It protects individuals and businesses from financial loss due to property damage, liability claims, and other unpredictable events. Unlike life insurance, P&C insurance covers losses that happen to occur during the insured's lifetime.

What Kinds of Coverage Does P&C Insurance Offer?

1. Property Coverage: This includes financial protection against losses that might be caused by property damage. The causes can range all the way from natural disasters, fires, to accidents, vandalism, or theft.

2. Liability Coverage: This includes the insured’s protection from legal liability arising from claims of bodily injury or property damage caused by the insured or their designated representatives. It works towards covering costs associated with legal defense, judgments, and settlements.

3. Other Coverages: Other P&C insurance policy coverages may include:

• Workers' Compensation Insurance: Designed to provide benefits to employees who might have succumbed to work-related injuries, occupational hazards, or illnesses.
• Commercial Auto Insurance: Designed to protect businesses from financial losses related to accidents that involve company vehicles.
• Umbrella Insurance: Designed to provide additional liability coverage, usually going beyond the limits of underlying policies.
• Marine Insurance: Designed to protect cargo, ships, and other marine vehicles from damage.

Having understood the kinds of coverage that P&C Insurance offers, it is also vital to know the types of P&C Insurance and for what provisions your customers can use it.

Types of P&C Insurance

Personal Lines: Personal lines in P&C insurance cover individuals and families. Common personal lines insurance categories are:

1. Homeowners Insurance: Protecting homeowners against property damage and liability claims.
2. Auto Insurance: Providing coverage for accidents that involve personal vehicles.
3. Renters Insurance: Protecting renters against property damage and liability claims.

Commercial Lines: Commercial lines in P&C insurance comprise businesses and organizations. Common commercial lines insurance categories include:

1. Commercial Property Insurance: Protecting businesses against property damage.
2. Commercial General Liability Insurance: Protecting businesses from liability claims.
3. Commercial Auto Insurance: Protecting businesses against accidents involving company vehicles.
4. Workers' Compensation Insurance: Providing benefits to employees who suffer work-related injuries or illnesses.

Being well-versed with the intricacies of P&C insurance is a non-negotiable for insurance professionals, as it constantly deals with a complex interplay of risk assessment, policy design, and claims management. This foundational knowledge is key to understanding other P&C products and their applications.

P&C Insurance Processes

In the Property & Casualty (P&C) insurance sector, following best practices and keeping the process workflow smooth is extremely critical to ensure easy operations, significant profit margins, and customer satisfaction.

Let’s look at all the processes that a P&C insurance agent should be hyper-focused on, and at what you simply cannot miss about them to execute them efficiently and easily:

1. Prospect Setup: Proactively collecting and uploading client data into agency management systems (AMS) creates the base for seamless interactions. Using CRM tools that self-integrate with AMS can help you automate the collection process and support you with classification of leads.
2. Quotes for Personal & Commercial Lines: Underwriting (UW) questions are vital when it comes to accurately assessing risk. You can opt for pre-built templates or widely available AI-driven solutions. These will help you minimize human error while expediting the quoting process by raising concerns about missing or inaccurate data.
3. Proposals: Utilizing automated proposal softwares can support you with creating policy options that match specific needs of the client and delivering on time while maintaining compliance.
4. Process Binder & Invoice: It’s time to cut off the traditional leash on the binder and invoicing process. Automating it through e-signature tools and AMS will help you steer clear of delays and potential administrative errors, facilitating quicker client onboarding.
5. Policy Process: Having a centralized document management helps with fast retrieval and modification of policies. This ensures updates are reflected promptly and compliance is followed across all the stages of the process.
6. Certificate of Insurance (COI): You could opt to integrate a COI issuance system into the AMS enables. This will help you with accurate and expedited generation of certificates, which are required by policyholders who need proof of coverage for contracts and/or vendors.
7. Endorsement/Change Request: Endorsement requests need to be reviewed, processed, and updated without being a time-consuming process, and an automated system creates room for just that. You can now choose to have pre-configured rules within AMS, and this can alert agents to address incomplete requests.
8. Process Notice of Cancellation & Reinstatement: Tracking cancellations and reinstatements with the help of digital alert imparts the power to take timely action. Ensuring no gaps in coverage will help you retain client relationships while sticking to regulatory compliance.
9. Audit: Internal and external audits of claims and accounts must be routinely scheduled and monitored. Automated audit checklists in AMS improve accuracy and tracking.
10. File a Claim: Efficient claims processing relies on automated intake forms and client portals. These reduce administrative work and speed up the claims cycle.
11. Recommendation Letter: Getting into client correspondence by using pre-set templates can enhance professionalism and ensure consistency when requesting recommendations or reviews.
12. Billing Assistance: Integrated billing solutions within AMS help track invoices and payment statuses, reducing the risk of delays and client disputes.
13. Loss Runs: Accessing and analyzing loss run reports from carriers quickly aids in renewal decisions, helping agents to secure better terms for clients.
14. Carrier Downloads: Automating carrier downloads into the AMS ensure that policies, endorsements, and other documents are up-to-date and readily accessible, minimizing manual input and errors.

2024 takeaways for the P&C insurance sector

“It is important to understand the challenges that the insurance industry faces nationally, are different from the challenges faced locally, and as insurance professionals we need to continuously account for both.”

-Jessica Weiland, Chief Operating Officer, Chapman Insurance Group

Back to the buzzing topic of how rapidly the P&C insurance sector is changing, there’s no denying that 2024 has been a very happening year and brings with it many takeaways that could help us decide and pre-determine our approach for the year to follow. Top-notch technological advancement, changing regulatory landscapes, and ever-changing customer expectations have given us a lot to glean. Here are the most unmissable takeaways from the year:

1. Accelerating digital transformation

(…and we absolutely mean the adjective!) The P&C insurance sector seems to be moving faster than your favorite motorbike on its quickest and thickest wheels. Here are the main digital transformation pillars that were promising, and we must continue looking out for:

• AI and machine learning: AI and ML were adopted in underwriting, claims processing, and risk assessment. Quite a few insurers leveraged these technologies to improve underwriting accuracy and successfully detect fraud.
• Blockchain: Blockchain technology turned into a promising solution for making claims processes smoother, while facilitating data integrity and smart contracts.
• Internet of things (IoT): IoT devices brought real-time data on insured assets to insurers, helping them make better risk assessments and come up with personalized pricing.

2. THE CLIMATE, regulatory changes, and compliance:

• Climate change: Climate change is tremendously impacting the P&C insurance industry. As a result, insurers focused on developing climate-resilient products and underwriting strategies. Over the last few years, regulatory bodies have also introduced climate-related disclosures and reporting requirements.
• Cybersecurity: The rise in frequency and severity of cyberattacks pushed regulatory bodies to come up with stricter cybersecurity standards for insurers. This naturally meant significant investments in cybersecurity and risk management.
• Data privacy: Data privacy concerns heightened leading to acts such as the General Data Protection Regulation (GDPR) and California Consumer Privacy Act (CCPA). Insurers revisited their data handling practices to follow through with these regulations.

3. Evolving consumer expectations:

• Digital channels: With digital channels becoming all powerful and all pervasive, consumers have been seen preferring online and mobile platforms for insurance purchase and claims management.
• Personalized experiences: As the most unbeatable trend, customers demanded more customized insurance products that were in tune with their specific needs. Insurers made the best use of data analytics to offer specific pricing and coverage options.
• Sustainability: Consumers became increasingly conscious of environmental sustainability and seemed to be on the lookout for insurers that offered products and services that would fit right in with their values.

4. The Changing Economics:

• Volatile Market: Economic fluctuations and geopolitical events became responsible for waves of uncertainty in the P&C insurance sector. Insurers faced difficulty with pricing and reserving owing to fluctuating risk exposures.
• Hardening Trend: In specific regions, the P&C insurance market underwent a hardening trend, with insurers increasing premiums to compensate for higher claims costs and economic uncertainty.

These observations made over the last few months help us construct a realistic picture of what the P&C sector is going through, and it is only that realistic picture which can help us position ourselves for success in the year to come.

Building on data and insights to get ready for 2025

Having found out some interesting P&C patterns over 2024, it is crucial to capitalize on those to turn in profits. Here are some curated suggestions if you’re wanting to turn things around for good:

• Continue to invest heavily in data analytics and AI and let these help you with deeper insights into risk factors, market trends, and changing customer expectations and behavior.

“The largest organizations plan to invest $10 million to $20 million annually in robotic process automation, or RPA systems alone.”

• Prioritize cybersecurity investments over everything else to protect sensitive customer data. Beware of emerging threats and have stringent security measures in place.
• Work on building climate-resilient products and underwriting strategies that are more in line with the increasing impact of climate change on P&C risks.
• Do all you can to deliver exceptional customer experiences through personalized products, reliable and informative digital channels, and efficient and quick claims handling.

Nearly 60% of customers expect real-time interactions with their insurance providers. (Source: Medallia)

• Stay on top of evolving regulatory requirements and ensure compliance with data privacy, cybersecurity, and climate-related regulations.
• Proactively identify potential risks and implement automation driven risk mitigation, as far as possible.
• Be in constant touch with emerging technologies such as blockchain, IoT, and automation and see how you can apply them to your operations, improve efficiency, and make room for new business opportunities.
• Collaborate with technology partners and try coming up with innovative solutions that tend to the needs of the changing market.

This laundry list of action items ticks off all the basics to set your P&C venture on the right track for the coming year. Ready to uncover more? As a next step, with automation being the talk of the town, let’s see how it is interacting with the P&C insurance sector, in particular.

AI Automation in Property and Casualty (P&C) Insurance

“The average homeowner files a property insurance claim every nine or ten years.” (Source: Zacks).

What this means is that homeowners rarely file claims, so helping them out with a satisfactory experience is a milestone the agency should have in mind.

The greatest barrier to operational efficiency in the insurance industry has been its reliance on manual processes, particularly in claims processing and policy underwriting. Traditional underwriting needs to be a thing of the past owing to its limited access to high-quality data, regulatory pressures, and complex risk assessments, that slow down turnaround times and leave customers dissatisfied.

The solution? AI-driven automation in P&C insurance. By harnessing vast datasets and machine learning, AI is all set to enable more accurate underwriting, faster claims processing, and better decision-making. Insurers can now process data in real time, leading to precise pricing models and noticeably reduced operational costs.

“Global combined ratios reached a startling 102% in 2022, presenting significant challenges for the global P&C insurance industry. A volatile risk landscape and the pressure of inflation have shown that the areas of concern that need a change are traditional underwriting strategies, risk prediction, and pricing.”

Legacy systems are prone to errors, inefficiencies, and delays in product launches. Furthermore, the lack of integration between business and technology teams leads to suboptimal solutions. AI changes the game by automating data collection and analysis, allowing underwriters to make data-driven decisions. By leveraging AI, insurers can offer better pricing transparency, improve risk profiling, and enhance customer satisfaction. AI-powered tools can even explain premium increases and recommend risk mitigation strategies. While we understand both sides, and the opportunities that AI presents seem lucrative, it’s important to understand where the holdback lies.

According to Michael Malfa, CEO & Co-founder, Boardwalk Insurance:

“Insurers do realize the importance of technology, and they're trying to embed it in all their future endeavors. The issue is that they must transition from outdated legacy systems, and these systems are very deep-rooted into their processes, procedures, and training manuals.”

Predictive analytics and predictive models can assist insurance companies by helping claims adjusters more quickly sort through outlier or potentially fraudulent claims while expediting more typical and predictable claims.

This can shorten the life cycle of all claims because claim adjuster resources can be freed up to focus on more intricate nuances of more complex claims.

AI and other tech are tools that can help insurance companies use claims data more effectively. When claims adjusters can access important data faster and more accurately, the lifecycle of the claim can be sped up.

According to the software company Accenture, “80% of insurance executives say that their organization's business and technology strategies are becoming inseparable— even indistinguishable.”

Insurance Agency Management Systems (AMS)

Having a word with industry leaders also brought us to the consideration of how the right Agency Management System can make the much-needed difference when it comes to being competitive enough in the P&C insurance landscape. The right AMS supports agents to be more productive by helping them with comprehensive policy tracking and easy access to client data. While some of us may think a good enough Customer Relationship Management (CRM) system may do the trick, it is important to understand that an Agency Management System (AMS) combines the generic features of a CRM with certain special features designed to cater to the insurance industry. You can rely on a good AMS for:

• End-to-end policy management: An AMS will have a centralized carrier feed and will track and manage policy applications, status, renewals, and even cancellations, all with a few simple clicks. This means you can look after your policy management needs all in one place, while having access to all the client data you need.
• Automating your workflow and providing real-time analytics: Choosing the ideal AMS will automate your business process and operations, making them organized and efficient. Moreover, it will also support you with real-time analytics that are drawn out from the centralized data to support your agency’s growth in the long run.
• Managing sales and processing commissions: Count on your AMS for lead management, defined sales efforts, and prospect communication. It might also support you with commissions processing by integrating all the necessary data in one place.
• Insightful reports and easy access: You can also use your AMS for generating data driven reports on metrics of your choice, for example: agent productivity, policies sold, claims managed etc., while having easy cloud-based access to it from wherever you want.

Support for Insurance Agencies/Agents, MGAs, Wholesale Brokers, Carriers

Agencies, MGAs, wholesale brokers, and carriers are facing a lot of pressure to keep their operations in check while also maintaining commendable levels of customer service and regulatory compliance. Thorough management of underwriting, policy issuance, renewals, claims processing, and regulatory compliance need one hundred percent attention when it comes to staying competitive, let alone turning in profits. However, these processes are inherently complex and that means natural bottlenecks, resource strain, and regulatory lapses now and then, even with the best of attempts.

This is where specialized support services come in handy. One great way to get your P&C insurance agency running with the right strategy and never losing sight of it is outsourcing back-office functions like policy administration, claims handling, and endorsements. As a player in the industry, you can then re-shift your focus to client servicing and core functions such as underwriting. Having a strong and reliable support system will mean smoother workflows, better data management, and adherence to regulatory needs without the burden of scaling internally.

Not just that, access to scalable solutions also helps agencies, brokers, and carriers handle peak volumes a lot more easily and effectively, while cutting down on operational costs and making room for better service delivery. If reducing turnaround times and improving task accuracy are two out of your many asks, seeking out the right support provider may turn out to be a great help.

What’s in store ahead?

Predictions suggest a higher industry ROE in 2024, with some improvement in personal line margins. Some forecasts suggest that industry ROE could reach up to 9.5% in 2024 and 10.0% in 2025, up from an estimated 5.0% in 2023.

Personal lines seem to be all set to push growth again in 2024; while commercial lines growth seems to be led by property. Research based forecast by Swiss Re institute suggests total direct premiums written (DPW) growth of 7.0% in 2024 – an upward revision from 5.5%, driven by momentum in personal auto – and 4.5% in 2025 after nearly 10% growth in 2022 and 2023.