Introduction

Charting New Horizons — Trends Shaping Carriers and Insurance Markets

Key Findings

Data and cybersecurity risks are the most cited business challenges by global (44%) and North American (45%) carriers.
64% of global and 54% of North American carriers anticipate that the market will harden within the next 12 months.
According to 77% of both global and North American carriers, accuracy of claims handling is the key quality metric to evaluate performance in claims management.
76% of North American carriers see reduced operational costs as the greatest value-add of generative AI adoption.

Economic volatility, climate change, technological advancements, and evolving customer expectations are transforming the insurance industry. Current market conditions have found carriers facing a wide range of challenges, from managing the financial impact of rising claims costs to navigating new regulatory requirements. These pressures are reshaping the operational landscape, influencing everything from strategic decision-making to resource allocation.

In this dynamic environment, staying informed is essential for carriers striving to remain competitive. To this end, we conducted a comprehensive survey to gather valuable insights from 200 respondents across North America, the United Kingdom, Australia, and New Zealand. In addition to typical insurance carriers, our survey participants included MGAs (14%), and underwriting agencies (12%). This diverse representation offers a well-rounded view of the current landscape and insights into the challenges and opportunities shaping the global insurance industry.

Key market challenges

Our survey results uncovered the primary challenges facing the insurance industry today. Both globally and in North America, three core challenges consistently stood out in our survey results: data and cybersecurity risks, premium affordability and insurability, as well as the increasing market competition. These issues highlight a business environment where financial pressures, digital vulnerabilities, and competitive dynamics are shaping industry priorities.

For 45% of regional and 44% of global respondents, the most common risks were data and cybersecurity. This highlights the growing number of cyber incidents that can negatively impact both operations and client trust.

Emphasis on increasing premiums and selective underwriting

Increasing premium rates is the primary approach respondents have adopted globally (57%) and regionally (55%) to manage evolving market dynamics. Additionally, 47% of global respondents are focusing on strengthening their claims management processes to better handle the complexities of the market. Among North American participants, however, the second major focus is on implementing tighter underwriting guidelines. The market conditions have led carriers to be more selective over their underwriting decisions, scrutinizing applicants’ risk profiles more rigorously and often setting stricter terms and higher premiums.

Globally and regionally, nearly two-thirds of both survey participants agree that rising claims costs is the key driver of premium increases, denoting the importance of effective claims management and proactive strategic planning in mitigating the impact of an increasingly complicated market.