Less than half of underwriters (48%) and actuaries (49%) now fear being replaced by AI, down from 74% and 80% respectively in 2024, suggesting an increasing understanding, ease and pragmatism around emergent technology and how it’s shifting the roles of insurance professionals. The widespread adoption agenda is further underlined by the spending trends of insurers; 96% are investing or plan to invest in data and analytics, with 85% prioritising automation over the next five years.
Tech perfection out of reach
However, expectations are rising fast, with an overwhelming 99% of respondents agreeing that their technology needs improvement and just 1% saying their technology is “perfect” – down from 4% last year, and 16% in 2023. This reflects growing awareness of what’s possible with AI and mounting frustration with legacy systems; nearly half (48%) of underwriters and actuaries cite limitations in Excel as a key barrier to optimal pricing and rating.
The research also clearly reflected the priority areas for transformation and technology investment. 100% of actuaries surveyed are investing (53% already investing) or planning to invest in pricing and rating technology within the next five years, while 98% of underwriters are investing (47% already investing) or planning to invest this year in underwriting workbench solutions.
Amrit Santhirasenan, CEO and Co-founder of hyperexponential, commented: “This year’s State of Pricing report makes one thing abundantly clear: underwriting transformations are in full flow, but priorities are rapidly shifting to the bottom line. Nearly every insurer surveyed identified pricing and underwriting as top priorities for technology investment, showing increased recognition that these functions are the critical engines of intelligent decision-making. This reflects growing maturity across the market and an acceptance that the industry’s future competitiveness depends on its ability to connect the analytical and the operational.”
Burnout fears remain prominent
The pressure to adapt is bringing mounting challenges for insurers, with concerns around data capabilities, burnout and upskilling rising sharply:
73% of underwriters and 82% of actuaries say they need stronger data analysis and reporting skills to keep pace with pricing transformation.
73% of underwriters and 74% of actuaries report burnout as a growing concern.
73% of underwriters and 82% of actuaries feel they lack key skills such as coding
The sense of impending burnout is understandable given underwriters spend up to three hours a day on manual tasks such as data entry, referrals and reporting. Meanwhile, 70% of actuaries say faster, more accurate pricing models would transform their role, up from 39% last year.
The shift away from softer skills is reiterated by emotional intelligence being selected by just 14% of respondents as a key attribute for the insurance professional of the future.
Amrit Santhirasenan added: “It’s hugely encouraging to see the sustained appetite for investment in data and analytics, alongside a significant drop in insurance professionals’ fears around AI and emerging tech. This represents a seminal shift for the industry, accepting AI as a collaborator rather than a competitor, an amplifier of human expertise rather than a substitute for it. AI is no longer the future of insurance pricing and underwriting, it’s fast becoming the standard.
“Inevitably, this progress will bring challenges as actuaries and underwriters feel an urgent need to upskill and upgrade their tech, bringing pressure on insurers to examine their infrastructure and accelerate change. However, the message from this year’s findings is both challenging and hopeful: the tools, talent and ambition are all in place – insurers must now create the right blend and environment that encourages innovation and enables meaningful transformation at scale.”
Traditional sources of news and events still hold weight
Despite the changing winds of digitisation, traditional sources of news remain highly valued by the majority of respondents: trade media (63%), peer exchanges (59%) and industry events (53%). Similarly, around two-thirds of insurance professionals continue to regularly attend conferences, seminars and networking events.
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