Navigating Change: The Future of Commercial Insurance

3 December 2025 / 4 min read

At VIC, industry leaders came together to discuss how brokers and insurers are adapting to a changing commercial insurance landscape.

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Market shifts: From hard to soft

The commercial insurance industry has been shaped by increased competition, political uncertainty, and economic changes, pushing it into a soft market. However, in the few years preceding 2024, carriers delivered good results on average, despite high rates and a period of high inflation.

While the market has softened faster than expected, most carrier balance sheets are in good shape. This is driving rates down, a trend that is likely to persist as more big carriers seek top-band growth and the market continues to soften.

Collaboration in a tightening market

While this change is challenging for insurers, Jes Westerman, Verisk's Chief Product Officer for UK, Ireland, Europe and APAC, believes this trend is a “very good thing for customers” because it will lead to more competition and innovation, which can create more choice for customers.

“Maybe there’s an opportunity for carriers, brokers, and MGAs to look at different areas of business and start competing in different ways as the market gets tighter,” he added during the Insight to Action session at VIC.

However, with economic uncertainty and stagnant growth in the UK, there is still some degree of caution. Many businesses tailor insurance purchases to what they perceive they need and are understandably prudent about their spending. But will they spend a little more to make sure all their sums insured are accurate?

The reality is that the significant market risk of underinsurance is no closer to being resolved than it was a year ago. However, it’s a complicated problem to fix, even when there is accurate data for rebilling. One big test is whether brokers can highlight this problem to their customers, have that awkward conversation, and provide an accurate rebuild cost.

Technology’s role in reshaping relationships

Amid this economic uncertainty, insurers should continue the journey toward automation. The underwriter’s job remains manual in many areas, although there has been great effort to raise the bar, for example, with the growth of e-trading.

It’s important to recognise how much things have changed. Two decades ago, the industry was very manually driven. Now, the premium volume that can be e-traded is increasing, which saves money and is a safe way to improve a business’s financials.

The commercial insurance industry is also using technology to acquire more trade-specific information, beyond credit and property data, which could create opportunities for innovation that the rest of the insurance market can’t yet deliver. It’s also experimenting with generative artificial intelligence (GenAI), which could help improve the relationship between brokers and underwriters. There is a very strong use case for this in automating administrative tasks, which could save time for underwriters to focus on higher-value work.

Evolving client expectations

Customers are savvier than they were five years ago. Managing general agents (MGAs) see a big change in terms of how customers want to trade. From a broker perspective, it’s important to make this process easy, as customers will choose the path of least resistance.

As the number of MGAs has grown significantly in recent years, the market’s professionalism and reputation are vastly improved from a decade ago. It’s now a sustainable, core part of the UK’s general insurance industry.

Furthermore, a perceived lack of service and innovation from some of the UK’s larger insurers has driven more business into the MGA market, especially post-COVID. Many businesses found it hard to get in touch with their carriers during the pandemic.

Arguably the most important factor underpinning the success of the MGA sector is its recent ability to attract top entrepreneurial talent, which is reflected in high remuneration.

The future of commercial insurance

GenAI and advancing automation will play a big role in this industry. The ability to use different data sets effectively and gain deeper insights into business activity will also be important, especially in a world that might include virtual underwriters and GenAI front-end agents.

AI will be sitting on teams and talking with them—not just summarising transcripts. However, it will struggle to emulate human attributes such as intuition or the “gut feeling”, which would be very difficult to automate.

The rise of AI will be the biggest change and opportunity for this industry in the years to come. While it will offer many benefits, insurance is still a relationship-based industry. It’s important not to remove this relationship-level interaction, which would be hard to replicate meaningfully. Companies that get this balance right can do very well.

As commercial insurance continues to evolve, technology, collaboration, and shifting client expectations are redefining the broker-insurer relationship. The VIC Insight to Action session underscored the need for agility, transparency, and innovation to meet the demands of a dynamic market.