Author: Steve Rhee
Digitalization and data analytics are no longer a future concept. How insurers, brokers and underwriters respond to the evolving technology landscape will have a huge bearing on the industry for years to come.
According to Reuters' 2025 insurance global technology report, 63% of insurers accept that generative artificial intelligence (GenAI) will change underwriting by delivering unmatched speed, accuracy and hyper-personalization.1
Gallagher sees this shift as an opportunity to improve customer experience by providing tailored insights, faster service and more intelligent planning. Here, we analyze the report's key themes, with insights from Steve Rhee, Gallagher's global chief digital officer.
Thriving in the digital insurance landscape: Gallagher's top tips
- Embrace customer-centricity: Technology investments should enhance the overall experience of customers, colleagues and partners. Solely focusing on cost-cutting or internal efficiencies is ill advised.
- Value the human element: Understand that digital tools can facilitate complex risk management processes but can never replace the power of human relationships.
- Prioritize integration: Recognize that new technologies must seamlessly integrate with existing legacy systems. Invest in dedicated teams and strategies.
- Strengthen data governance: Establish robust corporate and divisional data teams to ensure data quality, consistency and compliance. These teams are foundational for any digital initiative.
- Balance innovation with caution: While exploring emerging technologies such as AI and the Internet of Things (IoT), it's imperative to maintain regulatory compliance and ensure appropriate use cases.
Digital transformation meets trusted relationships
Developing strategies to enhance business outcomes through increased automation and efficiency is the primary focus of the insurance industry. Indeed, according to the Reuters report, three in four insurers have already embedded technologies such as automation, data analytics and cloud computing into their strategies. Brokers are similarly embracing digital transformation, using these tools to improve client engagement and enhance service delivery.
Rhee emphasizes this dual efficiency and automation focus to enhance the client experience, "In terms of digital transformation for insurance, particularly commercial insurance, it's crucial to focus on digital interactions at the right time and place, delivering insights and aiding decisions precisely when needed."
While digital tools are vital, commercial insurance remains a relationship-driven business. This underscores the importance of the trusted advisor, with digital interactions enhancing not replacing these key relationships.
Exploring the intersection of data analytics, automation and AI
The report also highlights the importance of data analytics and automation trends as key investment areas. Underwriting depends on rigor in assessing exposures and risk appetite.
Analytics and automation are where the synergy between brokers and underwriters becomes critical. Automating analytical processes helps insurers create tailored programs and empowers brokers to deliver more precise, client-centric solutions.
This enhanced data capability significantly strengthens the go-to-market strategy for clients, enabling brokers to tell a more accurate and compelling story about their client's risk profile, loss history and proactive risk mitigation strategies, which can help them secure better renewals. These benefits extend to everyone through more effective capital use and optimized risk transfer strategies.
For example, satellite imagery and predictive weather modeling in the Property insurance space enable the identification of climate risks such as roof damage before they escalate, to mitigate future losses. In Casualty lines, behavioral analytics can surface patterns in claims frequency and severity, helping insureds mitigate issues before they become losses.
Across all lines, automation reduces bottlenecks and frees up advisors to focus on what matters most — relationships and results.
A digital customer journey with the human factor
AI is the biggest conversation right now. The Reuters report also revealed that full-scale implementation of generative AI in respondents' organizations increased from 5% in 2024 to 15% in 2025.
Beyond this, AI is transforming the role of insurance brokers by automating routine tasks like quoting and claims processing ― saving time and reducing errors. It enables more accurate risk assessments through data analysis and supports personalized client recommendations. Chatbots and virtual assistants enhance customer service with instant responses. Predictive analytics help brokers identify sales opportunities more effectively.
But there are boundaries. Regulation, fairness and human oversight must guide every deployment. Gallagher's second annual survey on AI adoption reflects a clear shift in how global business leaders perceive AI: 68% see it as an opportunity, while those viewing it as a risk more than doubled from 5% to 11% from 2024 to 2025.
A machine can sort data but can't understand a client's anxiety after a major loss, nor can it offer the guidance that only a seasoned advisor can provide. That's why the focus isn't just on capability but also on AI integrity.
Implementation hurdles
A significant challenge for many organizations is that integration isn't always a primary strategy. It can become an afterthought and lead to cost overrun, delays and difficulties in mapping accurate data. According to the report, only a third of insurers rate their digital efforts as fully effective, while a slight majority —52% — cite integration with legacy systems and fragmented workflows as significant obstacles.
The IoT, including advanced sensors and connected devices for occupational safety and real-time risk monitoring, is a significant and expanding area. These products, from smartphones to smart home devices, create huge amounts of data for risk assessment, pricing and claims. However, when these technologies fail to deliver on their promise, it can lead to incorrect underwriting and delayed claims: indeed, 42% of respondents cited "product not working as promised" as their biggest hurdle. This failure often stems from integration complexities.
To tackle these implementation hurdles, seamless integration is imperative, especially with newer technology vendors. Rhee says, "While new vendors offer fresh ideas, they can lack experience connecting their solutions with existing, long-standing anchor systems. These legacy back-office systems represent major past investments and are not easily changed, making seamless integration crucial for effective data exchange."
When data from an IoT device can't properly flow into a broker's core system and doesn't function as intended, the overall solution undermines the benefits of automation and predictive insights. This problem applies to IoT devices such as smart home sensors, telematics devices in vehicles and specialized sensors used in commercial properties.
Putting the customer first
A deep commitment to the customer journey is what truly sets a strategy apart. "The report notes that many organizations prioritize internal process improvements, often for cost-cutting or automation. But the focus should be on the customer experience," Rhee comments. "This approach is about delivering the most value, the best solutions and the right data, along with an appropriate balance of AI, all delivered at the right time."
Data and analytics in action
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Rhee concluded, "It's about collecting information and using analytics to understand and quantify exposure. By using advanced tools, brokers can personalize advice, fine-tune strategies for placing coverage and speed up how quickly they respond to claims."
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