In the high-stakes world of commercial insurance, where precision, speed and foresight are essential; traditional methods of risk assessment are reaching their limits. For years, underwriters have relied on siloed data and manual processes to evaluate risk, but this approach is quickly becoming outdated. However, the emergence of generative AI (GenAI) is poised to revolutionize the underwriting process. Far from being just another upgrade, GenAI promises to deliver unprecedented accuracy and efficiency, fundamentally reshaping the commercial insurance landscape. Global gross premiums are expected to reach $722 billion by 2030, driven largely by growth in China and North America (Deloitte’s 2024 global insurance outlook). Considering this soaring growth, could GenAI-powered underwriting be the silver bullet that transforms commercial insurance? Now is the time to prepare, as underwriters will need every advantage to keep pace. The traditional landscape: limitations and challenges In commercial insurance, traditional risk assessment relies heavily on the meticulous gathering and analysis of vast amounts of data from broker submissions. It includes presentations, schedules of value and loss runs — most of which is unstructured. This process is not only cumbersome and time-consuming but is also constrained by the limitations of human capacity to accurately interpret and forecast future risks. Insurers have historically faced several key challenges, including: Data silos: fragmented data sources that result in incomplete risk profiles Human error: subjective judgment and potential biases that can skew assessments Slow turnaround: lengthy underwriting processes and manual reviews that delay policy issuance Static models: reliance on historical data without accounting for real-time changes These limitations often lead to significant delays in risk analysis and quote generation, resulting in a high number of lost or abandoned policies. The situation clearly highlights the urgent need for a transformative approach that leverages modern technology to enhance accuracy, speed and reliability in risk assessment. The real potential of GenAI is unlocked when it is combined with other AI capabilities like OCR and NLP. This combination helps streamline underwriting tasks and significantly improves the quote-to-bind ratio. Enter GenAI: a game changer for risk assessment Generative AI (GenAI), a cutting-edge subset of artificial intelligence, is revolutionizing the way commercial insurance assesses risk. By leveraging advanced machine learning algorithms and vast computational power, Gen AI can analyze complex datasets far beyond the scope of human capability. Here’s how GenAI is set to transform the landscape of commercial insurance risk assessment: Enhanced data integration and analysis: GenAI excels at seamlessly integrating and analyzing data from diverse sources, including real-time inputs from IoT devices, social media and market trends. This comprehensive approach allows insurers to develop more accurate risk profiles and proactively anticipate potential threats before they materialize. Automation and efficiency: With GenAI, labor-intensive tasks like data collection, content summarization, analysis and reporting are automated. This not only accelerates the underwriting process but also minimizes the risk of human error. Consequently, insurers can issue policies faster and provide an enhanced customer experience. Personalized risk assessment at scale: GenAI enables insurers to move beyond traditional one-size-fits-all models, offering personalized risk assessments tailored to the unique profiles of individual businesses. This leads to more accurate pricing, fairer policies and improved risk mitigation strategies. Leveraging the true power of GenAI While many AI-powered tools and frameworks, such as those for document processing, already assist underwriters with data and content extraction, the real potential of GenAI is unlocked when it is combined with other AI capabilities like optical character recognition (OCR) and natural language processing (NLP). This combination helps streamline underwriting tasks and significantly improves the quote-to-bind ratio. GenAI can provide customized and contextual summaries from multiple documents, transforming how risks are categorized and assessed. By harnessing the immense power of GenAI, the underwriting process becomes more efficient, accurate and data-driven. This enables underwriters to make more informed decisions about risk assessment, ultimately leading to better pricing and improved outcomes for both insurers and policyholders. An example of innovation: the next-gen underwriting solution Imagine an underwriting solution that combines the latest technologies — natural language processing (NLP), large language models (LLMs), generative AI and custom machine learning models — to create a comprehensive framework for transforming how underwriters assess risks and do business. This innovative approach eliminates friction points, streamlines workflows and enhances decision-making for underwriters. The key features of this cutting-edge solution include: Contract content extraction: Advanced OCR and NLP techniques automatically extract relevant content from large contract documents and organize it into a structured format, eliminating the manual effort of data entry and interpretation. Summarization: LLMs generate concise summaries of lengthy contract texts, enabling underwriters to quickly comprehend the key requirements and focus on critical details. Risk assessment and scoring: Custom machine learning algorithms provide precise risk categorization and assessment based on the specific risks associated with each business. Every contract document is assigned a risk profile score, helping underwriters make faster, more informed decisions on whether to proceed with an application. Digital assistant feature: A copilot/digital assistant functionality allows underwriters to query large contract documents and receive contextual responses, enhancing their ability to analyze complex information swiftly. Just a dream? This is indeed now a reality. It was developed by Eviden’s financial services and insurance AI teams and is already implemented at select insurance clients. This framework has demonstrated it can reduce friction for underwriters by up to 30%, significantly boosting productivity and improving the quote-to-bind ratio for carriers. Shaping the future of risk assessment with GenAI The GenAI commercial revolution for commercial insurance is going on. By transforming underwriting assessment through better data integration, predictive analytics and automation; insurers can now overcome traditional limitations and challenges of their risk evaluation processes and adapt to a rapidly changing landscape. Start your underwriting transformation today and take the lead in meeting the demand for $722 billion in global gross premiums projected by 2030. To know more: Discover how Eviden enables frictionless underwriting. Reach out to Vaibhav Raute or Shreenivas Shenoy to discuss your specific underwriting transformation challenges and priorities.