By William Nibbelin, Senior Research Actuary, Triple-I
The rate-filing process for homeowners’ insurance has become less efficient and effective, a new study by the Insurance Research Council (IRC) shows.
The report – Rate Regulation in Homeowners Insurance: A Comparison of State Systems – analyzed industry data from 2010 through 2024 across all states, including the District of Columbia. The study found that, not only is it taking longer for insurers to get rate increases approved, but the increases are lower than requested, with bigger gaps between the request and the granted amount than had previously been the case.
Key findings:
The number of rate filings is growing at a compound annual growth rate of 3.3 percent from 2018 to 2024 nationwide.
The average number of days to approval grew from 44 to 63 days.
The number of filings withdrawn increased from 2.9 percent of filings to 3.9 percent of filings.
The percentage of filings receiving less rate impact than requested grew by more than 10 points.
The disparity in approved rate impact grew by nearly 1 point.
Market concentration (as measured by the Herfindahl-Hirschman Index, or HHI) decreased by 14.6 percent.
The residual share of direct written premium has grown at a compound annual growth rate of 10.5 percent from 2020 to 2024
A strong-to-moderate correlation exists between net underwriting losses and premium shortfalls within states and across time.
Filing process measures and market outcomes vary by regulatory systems.
During this same period from 2010 through 2024, the homeowners’ insurance industry experienced a net combined ratio over 100 in 10 of the 15 years. Combined ratio – calculated as losses and expenses divided by earned premium plus operating expenses divided by written premium – is a key measure of underwriting profitability. A combined ratio over 100 represents an underwriting loss.
The IRC report includes the determination of a strong correlation between underwriting loss and premium shortfalls, defined as the potential dollar difference between the effective filed rate impact and approved rate impact.
In California, for example, the time to approval exceeds that of the next highest state – New York – by more than four months. California also has the second-fastest-growing residual market share from 2.1 percent in 2019 to 8.2 percent in 2024 and the second-fastest-growing excess and surplus homeowners market share from 0.3 percent in 2010 to 6.3 percent in 2024. This means that, at most, only 85 percent of California homeowners’ insurance is covered by a standard policy.
Insurance is a trust-based business. Providing safety and security in a risky, unpredictable world is the core function of our industry, which hinges on engendering consumer peace of mind.
Yet trust has become a scarce commodity as U.S. adults report successively lower average levels of trust by generation, with only 34 percent agreeing that “most people can be trusted” in 2018 compared to 46 percent in 1972. Trust in institutions appears similarly bereft, according to a global survey from SAS and Economist Impact that links the current $1.8 trillion protection gap to pervasive distrust in insurers.
To improve public and cross-sector relationships, Allstate and the Aspen Institute recently launched the Trust in Practice Awards, a grant program honoring non-profit organizations that support civic engagement, volunteering, and bridging differences with intergenerational participants. Backed by the Allstate finding that 74 percent of Americans remain optimistic about their community’s future, the initiative aims to broadly recoup trust by first establishing a strong foundation in neighborhoods, schools, and local organizations.
By reversing community distrust – which “undermines democracy, increases anxiety, and reduces personal freedom,” said Tom Wilson, Allstate president and CEO – the program could motivate collective action and resilience efforts on a larger scale, sending ripple effects of greater trust nationwide.
Fueling economic outcomes
Such effects can further stimulate measurable economic growth. A 2025 PwC survey indicates that introducing “trust or safety” features substantially increases engagement and purchase intent, with 72 percent more likely to engage, 68 percent open to new products, and 59 percent open to related merchandise.
Despite clear benefits, trust-building investments continue to face widespread scrutiny as a perceived barrier rather than facilitator of growth, the survey notes. Whereas AI, for instance, might quantifiably boost operational efficiency and reduce costs, pinpointing similar results from specific trust and safety measures can be more challenging, potentially leading organizations to overlook their importance.
Triple-I and SAS centered the insurance industry’s role in guiding these conversations in their 2024 research on ethical AI implementation, highlighting the technology as an opportunity for insurers to educate businesses less experienced with complex safety regulations. Prioritizing data privacy and integrity must occur alongside any innovation, the report emphasizes, to alleviate these concerns for consumers across all industries.
Transparent discussions are also key to combating legal system abuse, valued at $6,664 per family of four in added costs for basic goods and services. Commandeering the trust once associated with insurers, predatory “billboard” attorneys invest billions of dollars annually into advertising inflated settlements that often yield only marginal awards for the injured party, creating a more uncertain and deceptive litigious environment.
To bolster stakeholder education on the reality of legal system abuse, Triple-I founded an awareness campaign that includes brick-and-mortar interstate billboards in Atlanta and Baton Rouge and a consumer guide, co-authored by Munich Re, that explains its economic impacts. A consumer microsite additionally promotes various state reform movements.
Trust is neither automatic nor unilateral. While legal reform momentum and cutting-edge insurance products can help restore affordable and widely available coverage, closing the protection gap will require ongoing coordinated efforts that can translate for modern audiences the industry’s dedication to putting people first.
Current U.S. tariff policies – especially those targeting materials essential for repairing and replacing property after insured events – can complicate assessing and predicting risk. The future of these policies will depend on pending court rulings, creating even more uncertainty for insurers and their customers.
This uncertainty is compounded by a paucity of federal data during the current U.S. government shutdown.
“Normally, as we wrap up Q3, we have enough data as economists, policymakers, and business leaders to start thinking about what the year will look like by the end of it,” said Dr. Michel Léonard, Triple-I Chief Economist and Data Scientist, in a recent interview with Insurance Thought Leadership (ITL) – like Triple-I, an affiliate of The Institutes. “That’s not the case right now.”
In a typical year, Léonard explained, quarter-over-quarter GDP progresses minimally, facilitating more confident quarterly projections. Ongoing trade agreement ambiguity, however, means economists are “flying blind about GDP at the moment.”
Such uncertainty also influences inventory management behaviors, as companies up and down the supply chain that rely on imported goods have decided to stockpile ahead of tariff enactments at a record pace. Though replacement costs continue to rise more slowly than overall inflation, consumers will likely face rising costs as supplies dwindle, which could disrupt the P&C insurance industry’s positive momentum heading into next year.
Personal auto performance, for instance, saw considerable improvement, but reflected consumers purchasing vehicles to circumvent later post-tariff prices, potentially leading to “less growth in the second half of the year and certainly next year,” Léonard said.
Paul Carroll, ITL editor-in-chief, added that companies may delay investing in domestic manufacturing as tariff uncertainty persists, thereby further delaying potential economic boosts. He and Léonard agreed that these factors in combination suggest the full impact of tariffs will require more time to unfold.
Despite an unclear 2026 forecast, Léonard emphasized that insurers appeared to avoid “the worst-case scenarios” this year, demonstrating a “resilient U.S. economy, both in terms of growth and inflation.”
“We’re going to end the year most likely in a better place than we expected, and we should be very happy about that,” he concluded.
A complete transcript of their discussion is available here.
By Jeff Dunsavage, Senior Research Analyst, Triple-I
“Risk-based pricing” is a basic insurance concept that might seem intuitively obvious when described – yet misunderstandings about it regularly sow confusion and spark calls for government intervention that would likely do consumers more harm than good.
Simply put, it means offering different prices for the same level of coverage, based on risk factors specific to the insured person or property. If policies were not priced this way, lower-risk drivers would necessarily subsidize riskier ones.
Confusion ensues when actuarially sound rating factors intersect with other attributes in ways that can be perceived as unfairly discriminatory. A new Triple-I Issues Brief sorts out the reasons for such confusion and explains why legislative involvement in insurance pricing is not the answer to rising premiums. In fact, the report says, such involvement would tend to drive premiums up, not down.
Worries about equity
Concerns have been raised about the use of credit-based insurance scores, geography, home ownership, and motor vehicle records in setting home and car insurance premium rates. This confusion is understandable, given the complex models used to assess and price risk. To navigate this complexity, insurers hire teams of actuaries and data scientists to quantify and differentiate among a range of risk variables while avoiding unfair discrimination.
Triple-I’s brief shows how one frequently criticized rating factor for auto insurance – insurance-based credit scores – effectively tracks collision claim frequency. Drivers with the worst 10 percent of scores have twice as many collision claims as the best 10 percent. The sophisticated tools actuaries and underwriters use ensure fair, accurate pricing, and insurers do everything they can to see that all valid claims are paid on time and in full.
Climate and inflation
Areas that were once less vulnerable to certain natural perils – such as wildfire and hurricane-related flooding – increasingly are being affected by these costly events. Furthermore, more people have been moving into at-risk areas on the coasts and in the wildland-urban interface (WUI), putting more property into harm’s way.
Insurance pricing must reflect these increased risks to maintain policyholder surplus – the funds regulators require insurers to keep on hand to pay claims. In some states, this increased risk – combined with regulatory decisions that make it hard to raise premium rates to the levels needed to adequately meet it – has forced some insurers to reduce their exposure and not write as many policies and even withdrawing from states completely. In these states, not only has homeowners’ coverage become less affordable – in some cases, it has also become less available.
Another factor driving up premiums is inflation. As material and labor costs rise, the cost to repair and replace damaged homes and vehicles increases. If premium rates don’t reflect these increased costs, insurers would quickly exhaust their policyholder surplus. If their losses and expenses exceed their revenues by too much for too long, they risk insolvency.
A role for governments
Policymakers naturally want to address the impact of rising costs – including insurance premiums – on their constituents. A good start would be to help reduce risk by modernizing building codes and incorporating resilience into their infrastructure investments. Reduced risk and less costly damages would, over time, translate into lower premium rates.
Governments also can work with insurers and other stakeholders to incentivize homeowners to invest in mitigation and resilience. The Strengthen Alabama Homes program is a great example of one such collaboration between state government and the insurance industry that has measurably improved results and is beginning to be imitated by other states.
I wrapped up my first-ever Climate Week NYC last week at ClimateTech Connect. After their two-day April event in Washington, D.C., I could hardly miss this special half-day update when it was so close to home.
Fifty-plus attendees crammed a room near Grand Central Station, and I immediately spotted familiar faces and had the opportunity to meet with a mix of industry veterans and relative newbies spanning all insurance disciplines, from underwriting and claims to the cutting edge of modeling and artificial intelligence. Top insurance thought leaders and influencers were there to speak on climate-related issues of pressing interest to my industry and everyone it serves. The panel themes and the panelist themselves made it clear from the start that a blog post was not going to do the event justice.
The first panel – Pioneers Shaping the Future of Climate Resilience – was moderated by Francis Bouchard, managing director for climate at Marsh McLennan, whose bona fides include senior positions with Zurich Insurance and the Reinsurance Association of America. Francis moderated a no-holds-barred panel of young insurance leaders: Angela Grant at Palomar, Michael Gulla of Adaptive Insurance, and Valkyrie Holmes of Faura. The energy and expertise of these panelists left me feeling that the industry – in the face of myriad challenges – is being put into good hands.
The next discussion was moderated by Jerry Theodorou, a director at the R Street Institute whose professional background includes roles at Conning, AIG, and Chubb. It featured Dan Kaniewski, managing director and U.S. public sector lead for Marsh McLennan and a former FEMA deputy administrator, and Raghuveer Vinukollu, head of climate insights and advisory for Munich Re. The depth and timeliness of these three experts’ insights made for an engaging and thought-provoking session.
The third panel was both engaging and accessible – a bit surprising to me, given that it consisted entirely of PhDs. Steve Weinstein, CEO of Mangrove Property Insurance led a discussion among Joanna Syroka of Fermat Capital Management, Catherine Ansell of JPMorgan Chase, and M. Cameron Rencurrel at Mercury Insurance on not only “Why Science Needs to Be in the Boardroom,” but HOW young scientists can find their way there and decide IF that’s where they want to be.
Between these panels were presentations from representatives of several insurtechs who shared their data-driven solutions focused on understanding and addressing climate-related panels. All this in a period of about three hours (not including the networking reception afterward). Despite all the information shared, the event did not feel at all rushed.
If you weren’t able to make it and are feeling a bit left out, don’t fret! ClimateTech Connect 2026 will be held in Washington, D.C., on April 8 and 9, 2026.
Economic shifts, geopolitical uncertainties, cybersecurity trends, and mounting climate perils have created an increasingly severe and interconnected risk crisis, according to participants in a members-only Triple-I webinar.
In an environment constrained, for instance, by frequent natural disasters and rising replacement costs, risks no longer develop in isolation. They collide with and compound each other. Their combined impact exceeds the sum of individual risks’ effects. Such interdependence complicates identifying, let alone mitigating, the forces underpinning a specific risk.
“Under this new system that’s emerging, risk can propagate very rapidly through a host of otherwise disconnected networks,” TradeSecure president and cofounder Scott Jones told webinar host Michel Léonard, Triple-I’s Chief Economist and Data Scientist. “This new reality fundamentally challenges the core principles that insurance has relied on for centuries.”
Jones emphasized the growing unpredictability of risk on a global scale, particularly as nations impose export controls, sanctions, investment restrictions, and tariffs for purposes like economic competition. Companies with global footprints may struggle to ascertain these interwoven, sometimes competing regulations, creating compliance concerns and potentially exacerbating supply-chain disruptions.
With the frequency and severity of U.S. cyber claims on the rise, cyberattacks also carry substantial transnational implications. Sophisticated ransomware encounters can exploit businesses of all sizes, propelling privacy liability claims and related third-party litigation.
TradeSecure vice president and cofounder Michael Beck explained how the almost universal accessibility of malware – harnessed by criminal syndicates, activist groups, or even lone hackers – presents “a new class of systemic non-physical disruption” that could undermine “the entire system’s liquidity and stability.”
“A coordinated non-state cyberattack wouldn’t just steal money – it could stop the flow of money, causing many transaction failures and possibly triggering a wave of claims far beyond what traditional cyber policies are designed to handle,” Beck said.
Though insurers as well as business owners and consumers consider cyber incidents a chief risk concern, personal cyber take-up rates remain low, with the broader cyber insurance market facing its third consecutive year of declining rates. Misunderstandings surrounding cyber risk and benefits of coverage fuel this discrepancy, revealing a gap between agent perceptions of product value and that of their customers.
Increased legislative involvement in regulating homeowners’ insurance pricing and rates – as recently called for by some officials in Illinois – would hurt insurance affordability in the state, rather than helping consumers as intended, Triple-I says in its latest Issues Brief.
Rising premiums are a national issue. They reflect a combination of costly climate-related weather events, demographic trends, and rising material and labor costs to repair and replace damaged or destroyed property. Average insured catastrophe losses have been increasing for decades, fueled in part by natural disasters and population shifts into high-risk areas. More recently, these and other losses to which the property/casualty insurance industry is vulnerable were exacerbated by inflation related to the pandemic and Russia’s invasion of Ukraine. Tariffs and changes in U.S. economic policies have since put even more upward pressure on costs.
These increasing costs – if not addressed – threaten to erode the policyholder surplus insurers are required to keep on hand to pay claims. If surplus falls below a certain level, insurers have no choice but to increase premium rates or adjust their willingness to assume risks in certain areas.
To avoid this, many insurers have filed with state regulators for rate increases – requests that often meet with resistance from consumer advocacy groups and legislators. Illinois would not be the first state to try to ease consumers’ pain by constraining insurers’ ability to accurately set coverage prices to reflect increasing levels of risk and costs.
Practicality, not politics
Such efforts, while perhaps politically popular, confuse one symptom (higher premiums) of a growing risk crisis with its underlying cause (increasing losses and rising costs). Using the blunt instrument of legislation to address the complexities and sensitivities of underwriting and pricing would tend to disrupt the market and further hurt insurance affordability – and, in some areas, availability.
Rather than target insurers with misguided legislation, the brief says, states would be wiser to work with the industry to improve their risk profiles by investing in mitigation and resilience. The brief describes the causes of higher premium rates nationally and in Illinois and how other states have successfully collaborated to address those causes and reduce upward pressure on – and eventually bring down –premium rates.
“Triple-I welcomes the opportunity to collaborate with state policymakers to develop constructive approaches to risk mitigation and resilience that will benefit communities and consumers,” the brief says.
Improved loss ratios, strong premium growth, and lower retention rates characterized the U.S. auto insurance industry in 2024, according to LexisNexis® Risk Solutions’ 2025 U.S Auto Insurance Trends Report.
The report shows that, “while a number of insurers returned to profitability as the market softened,” the market was characterized by “record levels of policy shopping and switching, attorney representation, claims severity, and rising driving violations.”
Rate increases over the past two years helped U.S. insurers address profitability issues, the report said. Premium rate increases are beginning to ease, rising 10 percent in 2024, compared with a 15 percent hike in 2023, as market conditions soften. Insurer profitability is improving, with direct written premiums growing 13.6 percent, to $359 billion, and incurred loss ratios stabilizing, enabling some carriers to pursue growth strategies and file for rate decreases.
LexisNexis Risk Solutions also notes that tariffs may factor into how insurers consider rate in 2025. While the market wouldn’t expect the magnitude of activity seen between 2022 through 2024, tariffs, if they stick, could set off a ripple effect of moderate rate increases with implications across the industry.
Other trends identified in the report include:
Bodily injury claims severity jumped 9.2 percent, and property damage severity climbed 2.5 percent, year over year. In contrast, collision severity fell 2.5 percent for the same period.
All driving violations increased 17percent and driving violation rates across the United States surpassed 2019 levels.
Policy shopping reached an all-time high, with more than 45 percent of policies in force shopped at least once by year-end.
The report also noted that electric vehicle (EV) transitions are introducing new risks, as drivers moving from internal combustion engine vehicles to EVs experienced a 14 percet rise in claim frequency.
“Auto insurers continue to navigate a dynamic market,” said Jeff Batiste, senior vice president and general manager, U.S. auto and home insurance, LexisNexis Risk Solutions. “The combination of the market softening and a return to profitability presents a potential new chapter for the industry as insurers encounter a consumer base that is more willing than ever to shop for deals.”
Record levels of auto policy switching translated to 2024’s new policy growth rate of 17.7 percent year over year. It also added momentum to the ongoing customer retention decline across the industry.
Since 2021, retention has decreased five percentage points, to 78 percent, resulting in a 22 percent increase in policy churn, the report says.
“Historically, dropping even one percentage point is significant,” it says. “However, against a backdrop of heightened levels of shopping and switching activity, insurers may want to focus on their retention strategies, especially when long-tenured customers are hitting the market.”
Recent efforts to curb federal spending – particularly massive proposed cuts to several major federal science agencies and numerous FEMA grant programs – drew concern from panelists at Triple-I’s Joint Industry Forum in Chicago.
Slated to lose around half of their original budgets, organizations like the National Oceanic and Atmospheric Administration (NOAA) and the National Science Foundation (NSF) provide insurers with much of the research data needed to model climate risks, at no cost to insurers nor the broader public. Abolishing this research, which also enables daily weather and natural disaster forecasting, will increase underwriting costs and those associated with various other industries, including transportation, agriculture, and energy.
“Federal science agencies probably facilitate more economic activity in the country than any other federal agency,” said Frank Nutter, president of the Reinsurance Association of America (RAA). “Fully funding and restaffing those agencies is pretty critical.”
A host of cancelled FEMA mitigation programs have left dozens of catastrophe-prone communities without aid – including projects that were approved before the cuts. Ending the Building Resilient Infrastructure and Communities (BRIC) program, for instance, rescinded approximately $882 million in climate resilience funding — “money we could have spent on mitigation, so we don’t have to spend so much after a disaster,” said Neil Alldredge, president and CEO of the National Association of Mutual Insurance Companies (NAMIC).
Nutter added that “weighing against safety, teacher salaries – all the kinds of things that communities grapple with,” most former grantees lack the resources for “risk reduction or municipal projects and infrastructure” without federal investment.
Population growth in high-risk areas exacerbates the issue, Alldredge said.
“If you look at a map of this country and the population changes from 1980 to today, we have moved the entire population to all the wrong places,” he explained. Building properties capable of withstanding these weather patterns – let alone insuring them – has launched the industry into “a new era of risk.”
While the panelists agreed that opportunities to improve FEMA operations exist, they questioned President Trump’s consideration to disband it entirely by shifting to a state-based relief system.
David Sampson, president and CEO of the American Property Casualty Insurance Association (APCIA), noted that “the very nature of a natural disaster means that it overwhelms the local entity’s ability to respond,” rendering any state-based solution “unworkable.”
“I think we as an industry know where the low-hanging fruit for reforms are,” Sampson continued, because “we interact with FEMA on the ground after disasters.”
State-level legislative momentum
Though the Trump administration’s current plans do not bode well for the future of disaster resilience, insurers celebrated many state legislative wins this year regarding tort reform, notably in Georgia and Louisiana.
“Even at the federal level, there is a growing sense of awareness of the negative impact that an out-of-control tort system is taking on the economy and the American consumer,” Sampson said, highlighting a new bill that would impose taxes on third-party litigation funding.
Florida also successfully resisted challenges to its 2023 and 2024 reforms, which have already helped stabilize the state’s insurance rates and attracted new insurers after a multi-year exodus. Charles Symington, president and CEO of the Independent Insurance Agents & Brokers of America, pointed out that industry advocacy is crucial to tort reform survival.
“Once you get these beneficial pieces of legislation passed,” he said, “we have to fight the fight in every legislative session.”
Symington then contrasted Florida’s recovering market with California’s enduringly hostile regulatory environment, propelled by the 1988 measure Proposition 103.
Insurance Commissioner Ricardo Lara has implemented a Sustainable Insurance Strategy to mitigate the effects of Prop 103 – such as by authorizing insurers to use catastrophe modeling if they agree to offer coverage in wildfire-prone areas – but the strategy has garnered criticism from legislators and consumer groups.
“California doesn’t have the assessment ability like Florida does,” agreed moderator Fred Karlinsky, shareholder and global chair of Greenberg Traurig, LLP. “California is three decades behind.”
As insurers adjust their risk appetite to reflect these constraints, more property owners have been pushed into California’s FAIR Plan – the state’s property insurer of last resort.
“Our members are having to cobble together coverage,” said Joel Wood, president and CEO of the Council of Insurance Agents & Brokers (CIAB), who noted that the FAIR plan’s policyholder count has more than doubled since 2020.
Natural disasters like January’s devastating wildfires underscore California’s need for premium rates that adequately reflect the full impact of these risks, which is essential to the continued availability of private insurance in the state.
“When you have the right leadership in place – the governor, the state legislature – and you have the industry being effective in our advocacy, then we can improve these difficult marketplaces,” Symington concluded.
Global economic uncertainty emerging from recent U.S. policy actions was a major concern for thought leaders on the “Economics, Underwriting, and Geopolitics” panel at Triple-I’s Joint Industry Forum in Chicago.
Despite recently posting its most favorable underwriting performance since 2013, the property/casualty insurance industry faces several obstacles to continued progress, particularly from tariffs issued by the Trump Administration.
Short-term economic impacts
“Tariffs aren’t inherently good or bad,” said Triple-I Chief Economist and Data Scientist Dr. Michel Léonard, who co-moderated the discussion. “Where there is consensus among economists is that, in the short term, tariffs do lead to inflation and disruption.”
Put simply, tariffs can raise revenue for the issuing government while costing the domestic businesses that rely on imported goods. In advance of pending tariffs, companies up and down the supply chain are purchasing such goods at a record pace, which boosts the demand and prices of these materials. Consumers will inevitably shoulder some or all of the added cost.
Many proposed or enacted tariffs involve materials essential to construction and auto manufacturing. Earlier this month, for instance, the administration doubled its new steel and aluminum tariff to 50 percent – including on Canada, the largest steel supplier to the United States. P/C replacement costs will likely rise throughout the industry, leading to higher claim payouts and, consequently, premium rates.
Amid various tariff reductions, increases, impositions, and pauses, President Trump’s trade policies remain difficult to determine or predict. This lingering ambiguity – paired with impending replacement cost increases – creates a “double whammy” for insurers, said Aaron Klein, Miriam K. Carliner Chair and senior fellow in Economic Studies at the Brookings Institution.
“Other markets can adapt to that more quickly,” Klein said. “When I renew my auto policy in February, the insurer on the other side has to guess what the costs are going to be over six months.”
While in a period of extraordinary performance, the workers compensation line also faces potential risks from oncoming tariffs, noted Donna Glenn, chief actuary at the National Council on Compensation Insurance (NCCI). Mitigated by investments in technology and safety, workplace incidents could rise, she explained, as “a lot of the uncertainty puts businesses back in a defensive mode and asking, ‘how should I spend my money?’”
“I caution and say there will be some temporary lack of investment in safety,” Glenn continued.
Talent and technology
An evolving workforce poses additional risks.
“Workers comp has benefited from a very strong labor market,” Glenn said, pointing to consistently low U.S. unemployment rates, but current mass deportation efforts could undermine this trend. “We are accustomed to having a significant influx of foreign-born workers,” Glenn explained. “When we don’t – and when we shift to not having them – the labor market could stifle to some degree.”
Bridging the talent gap lends further urgency to this issue, as roughly 400,000 workers are projected to leave the insurance industry through attrition by 2026 in the U.S. alone, according to the U.S. Bureau of Labor Statistics. And with generative AI automating more processes across the insurance value chain, cultivating a workforce possessing the necessary skillset to oversee them compounds the problem.
“AI can certainly help improve productivity,” said Triple-I Chief Insurance Officer and co-moderator Dale Porfilio, “but we’re going to need people to do an awful lot of those jobs. We’re still going to have that talent gap.”
Embracing advanced technology, then, gives insurers an opportunity to both develop that expertise and rebuild the workforce by attracting younger tech professionals who might otherwise overlook the industry. Innovative companies like Argo Group are already paving the way for this collaboration.
Patrick Schmid, president of The Institutes’ RiskStream Collaborative, acknowledged that “getting clarity about how significantly you can leverage AI is very important.”
Concern about using AI in underwriting, Schmid said, given an absence of AI regulatory guidance, which does not exist federally and is set to be blocked on a state level.
To provide insight into these efficiencies, Schmid described how RiskStream – a consortium of insurers, brokers, reinsurers, and other industry leaders – applies AI to streamline data processing, lower operating costs, and enhance customer experiences. Beyond expediting business operations, AI offers potential solutions to a range of challenges plaguing insurers, Schmid said – including one application that might help mitigate legal system abuse by facilitating earlier claims intervention, preventing excessive attorney involvement.
The panelists agreed that insurers will continue to adapt their underwriting and pricing to reflect this dynamic environment and emphasized the economy’s strong, steady recovery post-COVID.
“There’s not been a single case of an economic expansion in recorded history dying of old age,” Klein said. “Are we near the tipping point? I don’t think so.”
