Guide | Beyond Legacy Tech: A Modernization Guide for the AI Era

The insurance industry is at a crossroads. While many carriers are exploring AI, few have achieved true transformation. Nearly two-thirds remain stuck in pilot projects, held back by outdated, siloed systems that fragment data and slow innovation.

In this new guide from Origami Risk, discover why modernization—not experimentation—is the foundation for AI success. Learn how modern, cloud-based SaaS platforms enable insurers to move faster, scale smarter, and compete in an era defined by intelligence.

Download the guide to uncover:

1. Why AI adoption has stalled, and how to break free from legacy drag
2. How modern, multi-tenant SaaS platforms accelerate AI deployment
3. A side-by-side look at build-versus-buy modernization paths
4. Tested frameworks to align technology, finance, and operations stakeholders
5. Strategies to turn modernization into a growth engine for underwriting, claims, and customer experience

AI is no longer a pet project—it’s the next stage of insurance evolution. But only those who modernize their core systems will harness its full potential.

Don’t let legacy tech hold you back.

Download the Guide Now  

Sponsored by: Origami Risk

The recent VIU by HUB Personal Insurance Marketplace Report and Rate Guide shows how broader economic trends affect premiums. Notably, the findings demonstrate that standard home and auto rate slowdowns are linked to cooling inflation, while rising rates for homeowners in disaster-prone areas stem from the increased frequency and cost of natural disasters.

With that data in mind, let's break down three of the biggest takeaways from our report:

1. Consumer expectations are rising amid rate fluctuations

Consumer expectations for comprehensive, affordable coverage are rising amid continuing rate fluctuations. While rate hikes may be stabilizing, volatility persists. Tariff announcements earlier this year created short-term disruption, but pricing has begun to level out; auto insurance premiums are moderating slightly, with the average increase closer to 10%.

Not surprisingly, on the property side, homeowners in catastrophe-prone areas still face steep increases. Regions at risk of wildfires, hurricanes, hail and convective storms will likely continue to see double-digit rate growth.

Flood policy counts are also rising as both public and private coverage evolves. As risks expand beyond traditional flood zones, pricing is increasingly tied to localized data.

All these factors have contributed to consumers feeling frustrated not only by rising costs but also by the complexity of an evolving insurance landscape. Insurance is no longer just an add-on to a home or car purchase – its cost makes it a major financial decision. This frustration is driving greater demand for clarity on coverage and costs, supported by neutral, expert guidance.

2. Embedded insurance shows customers that businesses care

Because insurance now occupies a larger share of consumer budgets, it's further affecting consumers' ability or willingness to make discretionary purchases. As a result, business leaders are asking: How can we help customers easily secure adequate, cost-effective coverage they feel good about?

The answer: enable customers to access insurance options through a licensed digital brokerage, either at or after point of sale, by embedding that brokerage's platform and expertise into a brand's sales process. At VIU by HUB, we call this brokerage as a service (BraaS). By partnering with a licensed brokerage, businesses can offer their customers multi-carrier solutions, paired with expert guidance, as part of the customer buying journey.

Think about it: when someone buys a car or applies for a mortgage, they're excited about their new car or home - insurance isn't top of mind. They're navigating a life event, and when it comes time to find insurance coverage, they likely need help. Embedding insurance options and expert advice before, during or after that purchase process is a convenient follow-through solution. For example, we recently worked with a top global automaker to integrate a digital insurance brokerage experience into its customer journey, giving customers a fast, trusted way to compare rates and receive licensed guidance across auto, home, motorcycle, renters and more.

The BraaS model places insurance within trusted shopping experiences and supplements it with live advisors, easy-to-understand choices and seamless operations. This doesn't just reduce confusion. It elevates customer satisfaction, increases revenue and brings long-term value to businesses seeking loyalty and repeat transactions.

3. The blend of human insight and AI efficiency benefits everyone

Artificial intelligence is evolving quickly and reshaping nearly every industry. Insurance brokerages are exploring how AI deepens understanding of customer needs to improve service, without sacrificing the critical element of human dialogue. We believe that, in the near-term, AI is most valuable when it enhances rather than replaces the human experience. For example, AI can be used to accelerate service by flagging life changes or analyzing documentation. It can also be used to give consumers more options and accessibility, such as after-hours service. But the role of empathy, judgment and trust cannot yet be replicated by algorithms. The future isn't human vs. AI – it's humans and AI. Our interactions use technology to support and enhance the human connection where it makes sense and in a way that consumers prefer.

What Comes Next

There's good news: price stabilization is beginning to take hold across some insurance sectors. Carriers are re-engaging in disaster-prone markets, even as rising claims costs, weather-related losses and increased repair costs remain real challenges.

The biggest shifts are consumer-driven. The insurance experience of tomorrow will be defined not by carriers' direct efforts, but by businesses meeting consumer expectations for convenience, clarity, compassion and capability. Embedded omnichannel brokerages are a powerful way to better serve those needs, enabling customers to access trusted insurance solutions as part of making the biggest purchases of their lives.

To better understand how insurers are addressing climate-related changes, the National Association of Insurance Commissioners (NAIC) requires insurers to file a Climate Risk Disclosure Survey that provides a discussion of how companies are addressing these risks and opportunities and integrating them into their governance structures, strategies and risk management.

We have reviewed many of these surveys. What is quite clear, albeit not surprising, is that insurers recognize that they face increased risks from chronic and long-term changes in climatic patterns but, importantly, they are well organized to deal with continuing and impending threats.

What is also clear from the disclosure, and perhaps less appreciated, is that insurers also foresee transformative opportunities. Specifically, these opportunities are expected to come from policies with risk control and loss prevention services. These policies help clients mitigate and build resilience to physical and climate risks. They also see underwriting opportunities in evolving and emerging technologies and industries.

Since insurers are investors as well as underwriters, they also see opportunities in allocating capital toward the energy transition and decarbonization efforts that occur in response to climate change.

The risks are well known but can be managed

Insurers are exposed to a wide array of physical and transitional risks stemming from climate change.

The physical risks arise from the increased frequency and severity of extreme weather events. These events, in combination with population growth and various socioeconomic factors, are likely to keep payouts climbing.

In addition to physical risks, insurers are faced with potential governmental responses to climate change that create conflicting policies across jurisdictions. This could lead to restrictions on insurers' ability to manage exposures and mandated coverages. There could also be higher compliance expenses, and costs for managing additional regulatory standards, especially those that require more disclosures.

Together these risks cannot be downplayed because they can have significant financial implications for insurers. However, the risks are well known, and managements have the right strategies and tools to deal with the issues.

But insurers also see underwriting and investment opportunities. They are expected to come (1) from policies with risk control and loss prevention services that help clients mitigate losses and build resilience, and (2) from coverages for emerging technologies and industries. Since insurers are also investors, they see opportunities in allocating capital toward energy transition and decarbonization efforts.

Mitigation and resilience

With higher climate-related losses in the future, mitigation will be critical to maintaining coverage availability and affordability. To do that the insurance industry will evolve from one that simply pays claims to one that has a critical role in helping policyholders reduce losses.

Hence, the key opportunity will come from designing policies with financial incentives to change behavior. This will be done not just for individuals and corporations, but also at the community level. Some resilient home incentives we expect to see expanded in the future are fire-resistant improvements, and elevated buildings in flood zones, among others.

In addition to offering products to reduce losses, insurers also see opportunities in designing coverages to enhance the ability to recover and adapt after events occur. Thus, insurers foresee the continued development of parametric insurance tied to climate indices (e.g., rainfall, temperature, and wind speed) that enables rapid payouts post events.

In addition to underwriting products, insurers see opportunities in offering comprehensive risk control and loss prevention services. These services include evaluations, technical information, consulting solutions, and educational resources to help clients reduce exposure to physical and climate risks.

Coverage of the latest technology

Insurers (as well as many others) expect that in response to climate changes there will be a gradual transition to clean energy technologies, infrastructure, and processes which will require insurance coverage.

These are some examples of what insurers note in their surveys:

• Renewable Energy Insurance: Coverage of onshore and offshore wind farms, solar farms, green hydrogen facilities, battery storage, hydroelectric plants, and energy conversion risks.
• Climate Technology Insurance: Coverage for climate technology developers, EV charging stations, and suppliers of solar panels and photovoltaic inverter solutions.
• Green Building & Construction Insurance: Product tailored for LEED®-certified construction, green upgrades in buildings, and construction projects focused on climate patterns like flood control, waterproofing, and fire safety.
• Electric Vehicle (EV) Insurance: Developing products and services to meet EV owners' needs, including specific EV policies, roadside charging coverage, and discounts for hybrid/electric vehicles.

On the investment side, insurers see climate change as an opportunity to generate attractive, risk-adjusted returns by deploying capital toward the global transition to a low-carbon economy, supporting emerging climate technologies, investing in green and municipal bonds, and enhancing community and infrastructure resilience.

Insurers anticipate that opportunities will continue to arise related to innovative technologies and solutions across a wide range of asset types. Among others, this includes support for climate change infrastructure, clean transportation, green buildings, pollution prevention, and sustainable water and wastewater management.

Conclusion

There is a natural tendency to view climate change negatively for insurers. But the world is adapting, albeit at a sometimes inconsistent pace, and the insurance industry has the opportunity to take a leadership role in this transition.

The bottom line is that insurance is a risk transfer business. Greater risks can lead to higher growth and enhanced returns if properly managed.

Following last week's elections in the U.S., it seems that for every two pundits you find three opinions about what the elections tell us about the prospects for the midterms coming up in a year. But seemingly everyone has settled on a theme that politicians must and will hit hard: 

Affordability. 

That word is everywhere, and not just among Democrats, who used it to win elections for governor in New Jersey and Virginia, for mayor of New York City and for a host of down-ballot offices, including in areas thought of as Republican strongholds. President Trump has vowed to wrest ownership of the affordability theme from Democrats, and a high-profile acolyte of his running for governor of New York says affordability will be her watchword, too — as does the current governor, who will represent the Democrats. Everybody loves affordability.

No matter who wins the arm wrestling match, you can be sure that billions of dollars in ads will run in the next 12 months hammering home the need to make goods and services more affordable in the U.S.

That represents an opportunity for the insurance industry. 

If you want to understand more about how hard politicians will push on affordability for the next 12 months, here are two good articles: 

• The Atlantic explores how Democrats turned affordability into victories across the board, adapting the core theme for a wide variety of offices in a host of different political environments. The article warns that the winners now have to live up to their ambitious promises, which will likely be hard to do. "Politics isn’t just about the words you put on your bumper stickers," the article cautions. "It’s about what you do if the bumper stickers work." But the writer predicts that affordability will show up in just about every imaginable form in Democratic campaigns across the country.
• The New York Times documents how Trump, and by extension the whole Republican party, has repeatedly claimed that everything is already affordable. Even though economic cheerleading by the Biden administration and the Harris campaign failed to convince voters in the 2024 presidential election, Trump has strained to create an alternate reality where grocery prices are down (they're up 3.1% in the past year), where inflation has disappeared (it's 3% in the past 12 months and has been rising, albeit slowly), where gasoline prices are plunging toward $2/gallon (they're down a penny since Trump took office, at $3.08/gallon, and show no signs of plunging), etc. He will surely continue making up numbers — he always has  — but since last week's elections, the Times says, Trump has declared that "affordability" is "a new word" and has vowed to claim it for his own. Buckle up.

I think insurers can ride this wave.

That may seem like a stretch at a time when rising car prices and disrupted supply chains have combined with some dangerous driving habits to send auto claims soaring and when natural disasters have exacerbated similar inflationary issues for homeowners insurance. There are obvious limits to what the industry can do to make insurance more affordable. Rates have to be sustainable. 

But policyholders are already sensitized to rising insurance premiums, and the drumbeat will continue. Just in the past week, the National Association of Realtors reported that the average age for a first-time home buyer in the U.S. has soared to 40, from 33 in 2020 and 28 in 1991, and insurance premiums are part of the problem. The flood of advertising and attention by politicians in the next year will, if I'm remotely correct, heighten the concerns. So the industry can either ride the wave or be swamped by it. I vote for riding, both by creating messaging about helping policy holders manage costs — and then by doing it. 

For carriers, maybe the best approach is to emphasize the Predict & Prevent model as much as possible. Homeowners insurers can subsidize sensors that detect the potential for fires and water leaks, or even offer them for free if that makes economic sense — as it increasingly does. Carriers can alert people to anything about their properties that increases exposure to wildfires, floods or storms, while offering discounts if the homeowner takes appropriate action. Even outside the insurance equation, carriers could offer advice on preventive maintenance or anything else that could help people manage down costs. 

Auto insurers could emphasize programs to help people drive safely (and lower premiums), to prevent theft, to get the car under cover as a hailstorm approaches, and so on. Anything to show customers that we're on their side as much as we can be.

Claims departments and third-party administrators could work even harder than they already are to expedite payments — and let the world know about their efforts — because people are feeling financial pressure. If there's a way to advance even a partial payment, that would help some people a lot.

Agents and brokers are where the rubber meets the road. They can pay even more attention to financial anxieties among clients and help them maintain the coverage they need while minimizing increases in premiums. 

Those are just some very rough ideas. I'm sure you have better, more sophisticated ones than I do.

My point here is just to note that affordability is going to be a hot button for at least the next year, if not longer. We should get in front of the issue.

Cheers,

Paul

P.S. There's an old joke about a young politician asking an aging veteran what the secret of his long-term political success has been. 

"Sincerity," the old politician replies. 

"Once you learn to fake that, you've got it made."

To be clear, I'm not suggesting faking anything. A) It's the wrong thing to do. B) The industry couldn't get away with it. 

I'm saying insurers should do whatever they can to address the affordability problem — then take all due credit.

Paul Hill currently serves as President at Job Search Intelligence, where he leads development of salary-data tools and analytics for job-seekers, employers and higher-education institutions. With over 20 years of experience, Paul has built a strong foundation in product development, marketing and data services, bringing a strategic focus to market expansion and customer engagement across the employment-intelligence sector.

Marty Ellingsworth is President of Salt Creek Analytics and Strategic Advisor to Pinpoint Predictive, bringing more than two decades of experience in insurance analytics, data science, and risk selection. He has held senior roles at J.D. Power, Verisk Analytics, Allianz, and USAA, where he focused on transforming data into strategic insights that improve underwriting accuracy, claims performance, and customer experience across the insurance value chain.

Paul Carroll

The creditworthiness of a person factors into the risk rating that insurers develop and use to price policies, and you have an intriguing new stream of data that I think could make those risk assessments more precise. We’ll get into how that works, but let’s start with how you developed your model and gathered the data that feeds into it.

Paul Hill

We started in 2008 by collecting compensation data and wholesaling it to compensation consultancies. We sold data on starting salaries to the academic community so they could help students build career plans.

By 2010, we became known for having reliable data on students’ employment and income after graduation. We contracted to do actuarial work for student lenders because we had just about the only reliable data on young people's capacity to repay their student loans. 

We expanded to credit card debt and auto loans and assessed the wealth-building capacity for young people, looking not just at their earning capacity but at household formation and their investment plans. 

This was all rooted in their academic competency.

We saw that trajectories vary significantly. Nurses, for example, represent extremely reliable individuals from a risk perspective. Women who study computer science are very reliable, while men in the same field might hop from startup to startup, making them less predictable. On another spectrum, young people in trades like electricians, plumbers, or HVAC technicians are eminently employable with no student debt, building wealth in their early twenties, with phenomenal financial outcomes.

Complementing the data on earnings potential, we built a model called "How America Spends." We analyze the 135 million households in the U.S., breaking them into income classes starting with households earning less than $15,000 annually, up to those earning over $200,000.

We've collected finely grained data on their annual expenditures—rent/mortgage, food, energy costs, and so on. Insurance, interestingly, we always categorized as non-discretionary (you need it to drive a car), but with years of inflation, more people than ever are treating it as a discretionary expense.

We total all expenditures by different household categories and build models relating to debt burdens to understand their capacity to meet expenses. Half of households are spending 100% or more of their income every month, and understanding how financially constrained households are allows us to estimate what they'll cut back on. We can identify specific trends, like middle-income households reducing certain food categories or cutting back on dining out in favor of eating at home - a trend we observed early in the inflationary years of 2021-2023.

For insurers, we've developed what we call our "default trajectory model." We break out these same households into income categories, age classes, and geographic regions, and our model shows how members of each category respond when facing financial pressures - their capacity to service typical obligations like purchasing auto insurance, maintaining their car, and paying credit cards. 

This model enables us to view how consumers evolve over time regarding credit card debt servicing, car maintenance, maintaining certain levels of insurance coverage, or dropping coverage completely. It's tailored for auto insurance companies to understand their customer base's financial stability and predict potential coverage changes.

Paul Carroll

I could see benefits both in terms of pricing risk and in terms of deciding who to target with marketing efforts.

Marty Ellingsworth

The customer insight and prediction frameworks of customer lifetime value are critical in both marketing and insurance. When you identify a customer who's on a growth trajectory that's going to be stable, who’s going to pay their bills and remain loyal long-term, you've found better risks. They're going to take care of their house, car, and finances. These customers aren't immune to accidents, but they're not reckless either.

The ability to understand how your book is performing in small business and households is valuable—knowing which households will be the most conscientious, which will be the most stable from income, payment, maintenance, and insurance perspectives, and which ones won't.

It's not that you can predict what one person will do, but a million people tend to follow similar patterns. Looking at risks in tranches—by state, class code, or household—reveals important trends. Some households are being disintermediated, some have higher layoff probability, and others show default trajectories. The trajectory analysis is particularly clever because it helps understand how leading indicators connect to subsequent events, revealing the path that problems typically take.

From that same ingredient technology—analyzing people living in houses, driving cars, working in various occupations and businesses—you can draw important conclusions. People with high equity in their home don't stress as much, so even when something bad happens, they behave differently than someone living on the financial edge. You also see patterns in moral hazard, both occupationally and in insurance contexts, where rationalization, opportunity, and motivation influence poor decision-making around fraud or crime.

I'm not suggesting that losing your job makes you a criminal, but it does create motivation to secure money. Sometimes that means finding another job, sometimes changing insurance coverage, and sometimes dropping coverage altogether just to survive. This type of quantifiable analysis is extremely valuable for describing what's likely to happen to your book of business and your overall business performance.

Everyone knows the trend will be downward for someone experiencing income compression, but they don't know by how much, and they can't segment the risk by different types of households. That's precisely what this analysis accomplishes.

Paul Carroll

I imagine this data can shed some light on the prospects for businesses, too.

Marty Ellingsworth

If consumers are losing, the businesses they frequent will be losing, too. You can expect that the total addressable market of businesses that serve a failing consumer will fail, too. You'll just find out that the businesses you thought you were writing just don't renew, and you don't see them. You won't know why you lost them as customers, but they might have gone out of business.

Paul Hill

Exactly. Many of our clients are caught kind of by surprise by outlier behavior from their customers. A lot of insurance companies, for example, have had a surprisingly high drop rate.

For us, these issues aren't so surprising because we're looking at a 20-year pattern by occupation of how people behave over time as they get out of college and into the employment market.

Understanding their capacity to remain employed is critical. When we look at income services and all expenses, we find that 60% of material defaults are a consequence of job loss. 

So understanding employment stability provides great insights as to a person's ability to service debts or just their standard obligations such as buying insurance.

Paul Carroll

Thanks, Paul and Marty. This was super interesting.

A subcontractor's certificate of insurance (COI) looks perfect on paper. Coverage boxes checked. Dates aligned. Everything appears in order—until an exclusion buried deep in the policy triggers a gap that sends liability straight back to the hiring company.

That moment—when "covered" becomes "exposed"—is when most organizations discover underinsurance. And it's happening more often than ever.

Underinsurance isn't just about a business lacking its own protection. It's increasingly about underinsured partners, vendors and suppliers, whose coverage gaps ripple outward, creating systemic exposure for the organizations that rely on them. Rising premiums, budget pressure, and dense policy language only accelerate this quiet threat.

Why Underinsurance Keeps Growing

Economic strain remains a top driver. Smaller businesses often choose insurance based on affordability rather than adequacy, selecting policies that look good on the cost column but leave dangerous gaps in protection. Most policyholders aren't insurance experts, and the buying process rarely offers the clarity needed to make informed choices.

Studies show 75% of small businesses are underinsured, and over 70% don't fully understand what their policies cover. That confusion leaves them—and by extension, their partners—exposed when contracts or project scopes evolve.

For larger organizations, this creates a blind spot. Contract clauses may spell out required limits and endorsements, but without consistent verification, those requirements often amount to little more than words on paper.

The Burden of Manual Compliance

Traditionally, insurance verification has been a marathon of manual work. COIs arrive via email. Someone checks dates, endorsements and entity names. Renewals are tracked in spreadsheets. Exceptions pile up.

Each step is a chance for error—a mismatched name, a missing endorsement, an expired limit quietly lingering in a file until a claim brings it to light.

Outsourced or "concierge" models were once the best path to confidence in compliance. They brought expertise, structure and relief at a time when most companies lacked the internal bandwidth or knowledge to manage insurance risk effectively. Over time, limitations for those models became clear. While they eased some of the pressure, they often shifted the burden rather than eliminating it. Companies still managed follow-ups, vendors still juggled multiple points of contact and compliance teams remained buried in inbox chaos, performing invisible work that rarely got easier over time.

Manual processes move at human speed. Risk, unfortunately, doesn't.

The AI Advantage

For decades, COI tracking lived in the administrative shadows—slow, repetitive, and error-prone. Even outsourced solutions often relied on teams of people manually reviewing documents.

AI changes that.

Modern AI-powered compliance platforms act as the expert partner compliance teams have always needed. Instead of flagging a problem for human review, AI can instantly read, interpret and validate insurance documents—line by line—against contract requirements.

It determines whether a COI is compliant, identifies missing endorsements and delivers clear, real-time next-step guidance to subcontractors. That means projects don't stall waiting on paperwork. Compliance teams don't spend hours in reactive review mode. And risk management finally keeps pace with the business.

Here's how AI enhances every step of the process:

• Real-time validation of COIs and endorsements—no bottlenecks, no backlog
• Automatic interpretation of policy language, turning "legalese" into plain language for easy action
• Instant feedback to subcontractors so gaps close faster
• Predictive insights that identify trends before they trigger losses

By replacing manual review with AI precision, organizations gain consistency, accuracy and speed while freeing compliance pros to focus on higher-value strategy and vendor relationships.

The result isn't just efficiency. It's resilience.

Practical Benefits for Organizations

Companies using AI-enabled compliance are already seeing measurable results:

• Audit-ready, always: Compliance data stays up to date year-round, not just during renewal season
• Clarity across teams: Everyone—from procurement to project managers—understands where coverage stands
• Cost and time savings: AI delivers expert-level oversight without expanding staff or outsourcing
• Stronger risk posture: Continuous monitoring identifies and resolves issues before they escalate

These are not incremental improvements—they're structural shifts in how organizations protect themselves.

Lessons From the Field

In high-risk industries like construction, underinsurance doesn't show up as a shock—it shows up as a pattern: policies purchased on price rather than protection, COIs reviewed too quickly to catch critical endorsements and renewals missed amid competing priorities

Each of these oversights can create costly liability not only for the subcontractor but also for the hiring organization.

Technology-driven COI tracking isn't a luxury any more. It's a necessary safeguard in an environment where liability risks evolve daily.

A Call to Action: From Reactive to Proactive

Underinsurance isn't a minor oversight. It's a systemic risk that demands proactive attention.

The organizations best equipped to handle it are those that frame compliance as a strategic safeguard, not an administrative task.

AI doesn't replace professional judgment. It empowers it. By surfacing key details, simplifying communication and enforcing consistency, AI gives compliance leaders the guardrails they need to protect every project, every time.

Closing the underinsurance gap isn't just about avoiding claims. It's about building stronger partnerships, protecting revenue and moving forward with fearless confidence.

Independent insurance agencies are operating under pressure unlike ever before. Customer expectations are shifting rapidly toward digital, always-on service. The talent pool is tightening as seasoned producers retire and fewer younger professionals enter the field. And direct-to-consumer players as well as digital-first aggregators are compressing margins and encroaching on traditional distribution territory. In this environment, "business as usual" is no longer enough. Agencies must modernize or risk being left behind.

The good news: Artificial intelligence (AI) is not simply a buzzword. When done right, it can become foundational to how agencies operate, liberating teams from administrative burden, enabling deeper relationships, and powering smarter revenue generation. And for independent agencies that embrace transformation, it can mean resilience in a turbulent market.

Why Now?

We see several converging forces making AI not just helpful, but essential, for agencies.

Let's start with talent constraints. Industry data shows that fewer than 25% of insurance professionals are under 35, and within the next decade or so, half the workforce may retire. With fewer experienced staff members and increased pressure on the remaining staff, agents are challenged to allocate their time to what matters most.

Second, the workflows of our industry are still heavily reliant on repetitive tasks — policy checking, reconciliation, submissions triage, renewal data entry, and servicing follow-ups, to name a few. These are necessary, but they absorb time that could otherwise be spent on the complex, value-generating work of advising clients, developing relationships, and growing the book.

Third, the competitive landscape now rewards speed and precision. Clients expect the same friction-free experience they get everywhere else. Carriers are more likely to prioritize more efficient agency partners. And digital competitors are not slowing down. In this environment, agencies that still run on time-consuming, manual workflows are at a structural disadvantage. Efficiency is no longer optional. It is a requirement to be competitive.

When we recommend AI for agencies today, we're not offering aspirational, "maybe someday" theories. We're talking about a prerequisite to transform capacity, accuracy, and human focus.

Vertical AI: The Right Kind of Intelligence

It's important to clarify what we mean by "AI," as there's a big difference between horizontal and vertical AI. Vertical AI is industry-specific models trained on the terminology, workflows and data of insurance. Horizontal AI is generic, one-size-fits-all models like ChatGPT that don't understand how agency workflows work or what a "policy binder" is, for instance.

Why does that matter? Because workflows in insurance are deeply nuanced. Carriers have different requirements, agencies follow complex servicing and renewal paths, and the relationships between client, agent and underwriter are built on trust and insight. Generic AI may automate some tasks, but it often misses the context that drives value in our world. Vertical AI, by contrast, is designed to comprehend insurance-specific data, pinpoint coverage gaps, analyze risk patterns across a book, and seamlessly integrate into agency systems.

Agencies investing in AI-enabled, insurance-specific workflows can realize meaningful gains. In fact, our research concludes:

• Automating many manual tasks can free up 40-50% of an agent's time.
• AI-based renewal and cross-sell suggestions can boost cross-sell revenue by 20-30%.
• Reducing risk of errors and omissions by automating validation and data entry can cut operational mistakes by up to 90% in certain processes.

These aren't abstract numbers. They represent capacity unlocked, risk mitigated, and revenue uplift realized.

From Admin to 'Hero Work'

Here's where the transformation starts to feel concrete.

Imagine your average producer or account manager spends 10-20 hours per week on administrative tasks, including checking policies at renewal, chasing missing information, reconciling commission statements, and updating client profiles. Now imagine if a significant portion of that load is shifted to automation via vertical AI that understands your book of business, flags data gaps, pre-populates forms, surfaces cross-sell opportunities, and automatically updates the system.

That freed time can be re-invested into meaningful client conversations, strategic risk reviews, proactive outreach, renewal strategy, expanding existing accounts, building trust and loyalty – what we call "hero work." The human element doesn't disappear. It's amplified as agency staff migrates from order-takers to advisors.

When producers and service teams are focused less on "keeping the lights on" and more on value creation, the agency's relationships strengthen, the book grows, the retention rate improves, and profitability follows.

Resilience Enabled

What is resilience in this context? It's more than survival. It's the capacity to absorb disruption and convert it into advantage. And vertical AI sits at the heart of that capability.

Unlocking agent capacity creates room for people to evolve into higher-value roles as the workforce ages and expertise retires. Instead of trying to replace institutional knowledge one-for-one with new hires, AI takes on the repetitive load so existing staff can be trained and redeployed into the "hero work" that a retiring generation used to do. Automating administrative bottlenecks reduces error risk and rework, and it gives teams the time and space to build new skills while still delivering day-to-day performance.

Shifting people toward relationship work creates differentiation in a commoditized market. Direct and digital competitors may offer price, but they rarely replicate trust, insight, and service depth. An agency whose team is equipped — via AI — with the insights to talk to clients about risk trends, coverage gaps, emerging exposures, and value beyond price is one that can build stickiness.

Leveraging vertical AI's ability to identify emerging cross-sell and upsell opportunities using enriched data from public sources, your own book, and insurer signals, builds not just cost savings, but new revenue streams. That mix of operational efficiency plus revenue growth is the essence of resilience.

The Bottom Line

Independent agencies—and the people who lead them—face a choice: continue investing human effort in low-value administrative tasks or redirect that effort toward relationships, strategic advisory, and differentiated service. Vertical AI makes the latter possible.

When you move your teams from admin to hero work, you're investing not just in efficiency, but in resilience. You'll build an agency that can weather talent gaps, margin pressure, and digital disruption. You'll foster the kind of business that doesn't just survive change—but thrives because of it.

We believe deeply that the future of the independent agency distribution channel will belong to agencies that enable their staff to focus on hero work. AI and its impact are no longer theoretical. It is available today to relieve people of admin tasks and put their time back on value. The reward is an agency poised for growth, differentiation, and resilience. When your people spend less time processing and more time advising, you position your business not just for tomorrow but for the next decade of success.

According to a recent report, commercial auto insurance underwriting losses continue to climb.

As brokers and agents work with their clients, it's important they stress approaches that can enhance insurability and help manage costs. There are three major ways to do this:

• Create policies and procedures for driver screening, training and monitoring.
• Leverage technology to ensure drivers are making safe choices.
• Maintain and inspect vehicles on a regular basis.

Driver screening

While safety features are an excellent addition to modern vehicles, they ultimately can't make up for poor driving behaviors. To stay safe on the road, organizations must select drivers who have an exemplary motor vehicle record (MVR).

But maintaining safe drivers does not stop with the selection process. Employers must offer annual training programs and provide continuous monitoring (such as telematics) to ensure drivers are operating vehicles safely. It's all too easy for a driver to become complacent—especially when it comes to distracted driving.

In particular, training programs should stress no cell phone use while driving. In recent years, that has become one of the key causes of crashes. Organizations also should establish procedures their drivers can follow for breakdowns, accidents and adverse driving conditions.

Innovations in technology

In recent years, the auto industry has come far with innovation in technology. Organizations can use this technology to identify risky driving habits and offer drivers more high-level safety features that reduce the risk of a crash. Some of the most prevalent safety features include:

• Telematics – With this technology, a device installed in a vehicle collects data from the vehicle's sensors, such as speed, location and engine status. Some telematics systems provide an alert to the driver when they are exhibiting poor driving behaviors; these alerts help correct behaviors immediately, which is preferred. Telematics data is ultimately transmitted to the driver's employer, who can track how fast they are driving, what their braking habits are and how much fuel they're consuming. Telematics can be especially helpful for usage-based insurance, which bases a company's premiums directly on its drivers' habits.

• Back-up and 360-degree cameras – Many vehicles are equipped with this safety feature now. In fact, it has become so prevalent that if an organization has vehicles without a camera, it should consider replacing them. These features enable a driver to view the surrounding area when backing up and reduce blind spots. This can help prevent fender-benders in busy parking lots and potentially reduce insurance premiums.

• Tire pressure monitoring systems – These systems, too, are extremely common in vehicles. They can alert drivers to rapidly changing air pressure in the tires, which may be the result of a nail, screw or other foreign object that has punctured the tire. Under-inflated tires are more prone to blowouts, which may lead to serious accidents. These monitoring systems are vital to decreasing the risk of a crash.

• Advanced driver assistance systems (ADAS) – Collectively, these technologies in a vehicle can help drivers make safe decisions and alert them to hazards. They include:

• Lane departure warning – alerts driver if vehicle is drifting out of its lane.
• Lane keeping assist – corrects steering to keep vehicle in its lane.
• Automatic emergency braking – automatically applies brakes if it detects a potential collision with objects ahead of the vehicle.
• Adaptive cruise control – adjusts vehicle's speed on cruise control to keep a safe distance from the vehicle ahead.
• Blind spot monitoring – alerts driver if a vehicle is in its blind spot.
• Forward collision warning – warns driver of imminent collision with another vehicle or object.

• Night vision and pedestrian detection systems – In low-light situations, these systems use infrared cameras and sensors to detect people and animals.

• Electronic stability control – In icy or wet conditions, this system applies brakes to specific wheels if it detects they are skidding.

• Side-impact airbags and other airbag systems – Studies have shown that side airbags can dramatically reduce a driver's risk of severe injury and death. So if there is a crash, the driver is much less likely to be injured or killed.

Vehicle maintenance

Another important way organizations can help manage vehicle insurance costs is by making routine checks part of their policies and procedures. They can do this by:

• Creating and sticking to a scheduled maintenance plan – refer to the owner's manual for recommended maintenance checks.
• Mandating pre- and post-trip inspections – this includes tires, lights, brakes and fluid levels.
• Establishing clear reporting procedures that ensure small problems don't turn into major hazards – drivers should be required to report anything out of the ordinary.
• Requiring emergency preparedness – all vehicles should be equipped with jumper cables and a complete emergency kit.
• Conducting seasonal maintenance checks – this includes swapping to snow tires for the winter and changing windshield washer fluid.

If organizations make a genuine effort to address the above suggestions, they can help make themselves more insurable and significantly reduce their likelihood of needing to file a claim.

Ransomware isn't just another IT headache. It has become one of the most disruptive business risks of the last decade, with the average ransom demand soaring to $2.7 million in 2024—nearly triple that of the previous year. As attacks escalate, cyber insurance has emerged as both a financial safety net and a source of controversy. Critics argue that guaranteed payouts fuel the ransomware economy, while insurers counter that they provide the expertise and resources companies desperately need to recover. So, is cyber insurance helping or hurting? The answer, as usual, is more complicated than it appears.

One of the biggest misconceptions about cyber insurance is that carriers simply cut a check when ransomware strikes. In reality, insurers are often the calmest (and most experienced) voice in the room. Backed by thousands of claims, they know when paying is the only path forward and when it's a mistake. They bring in seasoned negotiators, navigate legal landmines, and keep the process grounded in facts rather than fear. For a company facing permanent data loss or days of costly downtime, that kind of expertise can be the difference between bouncing back and going under. Insurers also have a vested financial interest in the outcome, but their depth of experience allows them to make rational, non-emotional decisions when clients feel like the sky is falling.

The Strategic Blind Spot in Cyber Insurance

Despite its critical importance, cyber insurance purchasing decisions are often made without the full involvement of those best equipped to understand cyber risk. Too often, financial and legal teams drive procurement with limited input from CISOs and security teams.

This disconnect can leave companies exposed to coverage gaps they only discover after an incident. Common blind spots include social engineering attacks and third-party breaches—threats security leaders know are likely but may not be properly accounted for in policies. If CISOs, finance, and legal teams collaborated earlier in the buying process, companies could align coverage with real-world risk scenarios and avoid costly surprises. One simple but overlooked practice is to run realistic attack scenarios—like a phishing scam or a third-party outage—against your policy to confirm how coverage would actually respond.

Cybercriminals move fast. Insurance carriers, bound by regulatory requirements and the slow process of drafting and approving new policy language, struggle to keep up. While the industry has made strides in adapting to emerging risks, there is always a lag. Threat actors do not need regulatory or internal approval to change tactics. Carriers do.

That doesn't mean insurance is standing still. Carriers are increasingly clarifying how they handle new exposures, from artificial intelligence to evolving ransomware techniques. But the structural lag is unavoidable for most insurance carriers—and it means businesses must recognize that cyber insurance may always be a step behind the threat landscape.

Navigating Exclusions: "Acts of War" and Beyond

Few topics generate as much anxiety as exclusions. "Acts of war" clauses, in particular, leave many companies wondering whether they would be covered if a state-sponsored attack hit their systems. The reality is nuanced. Some carriers have introduced coverage for acts of war, while others continue to exclude them. A similar pattern is now emerging with AI-related risks, with carriers taking divergent approaches.

The best way to evaluate these complexities is by working with a broker who specializes in cyber insurance. Generalist brokers may be able to place a property policy, but cyber requires expertise and constant monitoring of an evolving market. Specialized brokers can help businesses benchmark their coverage, identify gaps, and secure policies that align with their risk profile. Specialized brokers can also pressure-test policies against evolving risks and flag areas where different carriers take very different stances.

Shifting Responsibility Back to Businesses

It's tempting to blame cyber insurers for coverage disputes, but in most cases, the real issue lies in misunderstanding. In fact, most coverage disputes stem not from insurers refusing to pay, but from policyholders assuming protections were included when they never were. Better outcomes come when organizations bring more stakeholders into strategy discussions and lean on specialized brokers to navigate a complex market.

Cyber insurance is neither a silver bullet nor the villain some portray it to be. It is one component of a larger resilience strategy—one that needs to be aligned with security investments, risk appetite, and operational priorities. When used correctly, insurance can reduce chaos, accelerate recovery, and provide much-needed expertise in moments of crisis. When misunderstood or misapplied, it can leave businesses exposed and frustrated.

The future of ransomware defense will require collaboration: between CISOs and CFOs, between insurers and clients, and between the public and private sectors. Only then can cyber insurance fulfill its role as a stabilizer rather than an accelerant in the ransomware economy.

A study conducted by our colleagues at the Insurance Information Institute (Triple-I) and by the Casualty Actuarial Society found that legal system abuse and related litigation trends contributed to between $231.6 billion and $281.2 billion in increased liability insurance losses over the past decade.

That elicits a WOW from me. We've all been aware of social inflation for years now, and I've certainly read (and published) a lot about third-party litigation funding and new tactics by plaintiffs lawyers, but I had no idea the dollars involved were that large. 

Let's take a look at the report — and at some ways the insurance industry can fight back.

I won't be a total cheerleader for the insurance industry here. We all know that insurance policies are complex, that legal disagreements occur, and that insurers can be in the wrong. Sometimes, they deserve to be sued and deserve to lose. But the treatment of insurance lawsuits as an asset class that can be packaged and sold to big money investors, the use of AI to blanket insurers with claims and overwhelm their legal departments.... Those sorts of tactics, for me, cross the line into abuse. 

The report, Increasing Inflation on Liability Insurance – Impact as of Year-End 2024, found that "rising jury awards, litigation financing and evolving legal dynamics have driven higher claims costs and defense expenses" that have increased insurers' claims costs far beyond what economic inflation would lead you to expect. By category, the findings are:

• Personal Auto Liability: Legal system abuse and inflation increased losses and defense and cost containment by $91.6 billion–$102.3 billion, or 8.7%–9.7% of booked losses.
• Commercial Auto Liability: $52 billion–$70.8 billion, or 23%–31% of booked losses.
• Other Liability – Occurrence: $83.4 billion–$103.3 billion, or 27%–34% of booked losses.
• Product Liability – Occurrence: $4.6 billion–$4.8 billion, or 27%–28% of losses and DCC.
• Total: $231.6 billion - $281.2 billion

Claim severity, not frequency, is driving the rise in costs. "While the number of claims has generally declined, the average cost per claim has soared," the report says.

Those increased costs translate, of course, into higher premiums, so it's not just insurers who are losing. The broad population of policyholders is, too.

What can be done? 

In the long term, the sort of work that the Triple-I is doing to highlight abuses feels like the answer. Getting state legislatures to require the disclosure of third-party litigation financing, for instance, would go a long way toward changing public perception. Suits against insurers have historically been seen as little guy versus deep pockets. Increasingly, though, the kind of third-party money being thrown into lawsuits means the contests are between big money and insurers struggling to keep premiums reasonable— a hot issue especially in the wake of COVID's disruptions and now in the face of hefty tariffs. The change in perception could influence juries that otherwise would be inclined to award "nuclear" verdicts against insurers. 

In the short term, insurers can also use data analytics, including AI, to fight back, in ways laid out in four articles that Taylor Smith and John Burge have published with ITL in the past two years.

In the first, they show how "The Plaintiff Bar Is Winning in AI" and explore how insurance attorneys can level the playing field.

In the second, "Are We Losing Our Negotiating Power?", they describe how the plaintiff bar has investigated a staggering amount of money to improve its data on claims settlements and explain how the insurance industry can catch up. 

In the third, "The Tripling of Verdict Size Post-COVID," they not only provide the data to back up that headline but get deeper into how the insurance industry can (and must) combat the data advantage that the plaintiff bar has worked so hard to build.

Most recently, in "We're Losing Billions--Before We Ever Get to Court," they argue that settlement negotiations, not the courtroom, are where the real battle is being waged — and lost by the insurance industry. They suggest new tactics.

Stay tuned. This issue will be with us for a long time, and we'll keep publishing as much smart thinking as we can find on the issue, as often as we can. This is important.

Cheers,

Paul