The prolonged hard market in North American commercial insurance has come to an end, forcing property and casualty (P&C) insurers to rethink how they price risk, improve underwriting discipline and compete in an increasingly specialised market.
According to Earnix ReSource Pro’s latest eBook, The Next Challenge in Commercial Insurance Pricing, insurers are entering a period where profitability will depend less on favourable market conditions and more on pricing precision, operational efficiency and the ability to respond quickly to evolving risk profiles.
Operational optimisation remains the industry’s highest strategic priority as carriers seek to strengthen profitability through greater efficiency. Pricing precision has also become increasingly important, ranking fourth among 13 priorities identified by C-level executives. As market conditions soften, insurers can no longer rely on premium increases alone to maintain margins, placing greater emphasis on disciplined underwriting and accurate risk selection.
At the same time, commercial insurance is becoming increasingly specialised. Rather than offering broad, standardised products, insurers are developing tailored solutions for increasingly niche industries and micro-segments. While this creates new growth opportunities, it also introduces fresh underwriting challenges, as many emerging sectors lack the historical loss data traditionally used to assess and price risk.
This changing landscape is accelerating investment in underwriting technology. ReSource Pro found that 91% of commercial lines insurers are actively developing or implementing underwriting transformation strategies during 2026, with almost half (48%) planning to introduce or upgrade underwriting systems.
Data, analytics and AI are expected to play a central role in this transformation. Real-time data sources are enabling insurers to monitor risk more dynamically, improving pricing accuracy while supporting more proactive approaches to risk management.
Commercial fleet telematics is one example of this shift. Data collected through in-vehicle devices, mobile technology and electronic logging devices can support usage-based insurance models, allowing premiums to reflect actual driving behaviour rather than remaining fixed for six or 12 months. Similarly, Internet of Things (IoT) sensors can provide continuous insights into properties, equipment, people and environmental conditions, helping insurers improve underwriting, pricing, loss prevention and claims management while strengthening collaboration with policyholders.
The research also highlights the capabilities insurers believe will determine long-term success. Around 78% of commercial lines carriers identified advanced analytics, predictive modelling and AI as leading priorities for managing and extracting value from increasingly complex data sources. Organisations also cited the importance of developing clear AI governance frameworks, equipping employees with the skills to use AI effectively, building strong technology partnerships and maintaining modern, agile technology infrastructure.
Overall, ReSource Pro’s eBook, The Next Challenge in Commercial Insurance Pricing, concludes that AI, real-time data and modern underwriting technology are becoming critical as commercial insurers adapt to softer market conditions and increasingly specialised risks. Those able to combine advanced analytics with disciplined underwriting and agile operating models will be better positioned to compete in the next phase of the commercial insurance market.
Read the full Earnix article here.
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