Property and Casualty Insurance Digital Services: Adapting to Digital Technology Upheaval for Future Resilience

The property and casualty (P&C) insurance industry is contending with increased claim payouts and cost pressures from frequent catastrophes, geopolitical disputes, and rising inflation and interest rates, leading to premium hikes due to underwriting losses. Insurers are leveraging digital technologies to mitigate these challenges. They are also increasingly focusing on cyber insurance due to increasing security breaches and considering sustainability as a cornerstone driven by customer expectations and regulatory mandates. Moreover, enhancing customer experience remains crucial for maintaining competitiveness, with generative AI (Gen AI) significantly transforming user interactions and driving operational efficiency.

Both demand- and supply-side trends are covered in Avasant’s Property and Casualty Insurance Digital Services 2024 Market Insights™ and Property and Casualty Insurance Digital Services 2024 RadarView™, respectively. These reports present a comprehensive study of digital service providers in the P&C insurance industry, including top trends, analysis, and recommendations. The reports also closely examine the leaders, innovators, disruptors, and challengers in this market.

Avasant evaluated 40 providers using three dimensions: practice maturity, investments and innovation, and partner ecosystem. Of the 40 providers, we recognized 24 that brought the most value to the market during the past 12 months.

The report recognizes service providers in four categories:

• • Leaders: Accenture, Capgemini, Cognizant, HCLTech, IBM, Infosys, TCS, and Wipro
  • Innovators: DXC, EXL, Genpact, LTIMindtree, and Tech Mahindra
  • Disruptors: Atos, Coforge, NTT DATA, WNS, and Zensar
  • Challengers: CGI, GFT, Hexaware, Mphasis, Synechron, and Xceedance

Figure 1 below from the full report illustrates these categories:

“The P&C insurance landscape is undergoing a seismic shift, with the financial strain of escalating claims and operational costs,” said Robert Joslin, Avasant managing partner. “Investments in digital technologies such as Gen AI will be paramount to secure long-term profitability, customer loyalty, and regulatory compliance.”

The full report provides a number of findings, including the following:

• • The P&C insurance industry is leveraging IoT, cloud, Gen AI, and analytics to improve profitability and manage costs. P&C insurers have increased premiums to manage high claim payouts and cost pressures caused by the higher frequency of catastrophes, geopolitical disputes, and rising inflation and interest rates.
  • Insurance providers are utilizing Gen AI, automation, analytics, and geospatial technologies to fine-tune underwriting decisions. With P&C insurers facing underwriting losses, they are considering incorporating emerging technologies and multiple data sources for efficient risk assessment, identification of underwriting fraud, and insights for underwriters.
  • Insurers are deploying Gen AI to launch underwriting platforms, enhance customer experience, and assist employees in coding and summarizing reports. P&C insurance companies are moving up from the pilot stage, with 22% of Gen AI projects with service providers in the production stage.
  • Insurers are utilizing analytics, 3D imaging, and open-source technologies for sustainability and risk management. Regulators are mandating P&C firms to make climate-related disclosures. Insurance enterprises are launching sustainable damage management solutions, water risk assessment tools, net zero scenario offerings, and collaborating with partners for climate change research.
  • P&C firms are launching cyber risk mapping and penetration testing solutions and collaborating with Gen AI cyber startups and risk management firms. As cyber breaches increase, cyber insurance premiums worldwide are estimated to reach $23B by 2025, with US businesses accounting for around 56%. Incidents like the recent global IT systems outage make business interruption coverages more likely to be triggered as a part of cyber insurance.
  • P&C insurers continue to implement cloud, AI, automation, and analytics-based solutions to elevate customer experience. They are leveraging either in-house capabilities or collaborating with partners to streamline first notice of loss, optimize business processes and operations, enhance property inspections, and enable instant quotes.

“From climate change and cyberattacks to heightened customer expectations, the P&C insurance industry is facing unprecedented challenges,” said Vishal Garg, lead analyst at Avasant. “Gen AI offers a powerful solution, capable of revolutionizing underwriting, claims management, and customer service, enabling insurers to gain a competitive edge.”

The Property and Casualty Insurance Digital Services 2024 RadarView‚Ñ¢ also features detailed profiles of 24 service providers, along with their solutions, offerings, and experience in assisting property and casualty insurance companies in digital transformation.

This Research Byte is a brief overview of the Property and Casualty Insurance Digital Services 2024 Market Insights™ and Property and Casualty Insurance Digital Services 2024 RadarView™  (click for pricing).