The commercial insurance sector is in the midst of a profound technological transformation in 2026. Modular platforms, agile pricing engines, AI-driven risk modeling, and real-time data ingestion are no longer experimental—they’re table stakes for staying competitive. Underwriting and pricing have led the charge, with carriers leveraging predictive analytics, external data sources, and machine learning to make faster, more accurate decisions on complex risks.
Yet, as Farah Ismail, head of commercial lines at WTW, points out in a recent analysis, one critical area continues to lag: claims processing. Despite massive investments in digital infrastructure across the value chain, claims remains the industry’s persistent blind spot—under-digitized, slow to innovate, and increasingly costly in a hardening market.
Here are visuals illustrating the tech divide in commercial insurance: advanced underwriting dashboards vs. legacy claims workflows:
Why Underwriting & Pricing Have Pulled Ahead
Commercial lines are benefiting from:
- AI-powered risk insights — Tools now ingest satellite imagery, IoT sensor data, supply chain feeds, and unstructured broker submissions to refine pricing and selection in near real-time.
- Modular & cloud-native platforms — Carriers are breaking free from monolithic legacy systems, enabling faster product launches and dynamic pricing.
- Data abundance — External datasets (credit, geospatial, economic indicators) help underwriters see exposures that were previously invisible.
This has driven sharper risk selection, better loss ratios in targeted segments, and the ability to write emerging risks (e.g., AI-related liabilities, renewable energy projects) with more confidence.
Claims: The Stubborn Blind Spot
Despite the progress elsewhere, claims handling in commercial lines remains heavily manual, paper-intensive, and slow. Key challenges include:
- Complexity of commercial claims — Large losses often involve multiple parties (insureds, brokers, reinsurers, adjusters, lawyers), extensive documentation, and long-tail exposures (e.g., liability, workers’ comp).
- Legacy workflows — Many carriers still rely on outdated systems that don’t integrate well with modern tools, leading to duplication, delays, and poor visibility.
- Data silos — Underwriting data rarely flows seamlessly into claims, creating gaps in context and slowing triage, fraud detection, and reserve setting.
- Rising severity & social inflation — Nuclear verdicts, litigation funding, and economic pressures continue to push up average claim costs, making accurate reserving and settlement even harder.
Ismail notes that while underwriting has seen heavy digital investment, claims transformation has been slower due to regulatory scrutiny, the need for human judgment in complex cases, and the high cost of overhauling legacy claims ecosystems.
Here are infographics showing the claims lag: investment focus vs. actual digitization levels in commercial lines:
What’s Holding Back Claims Innovation?
- Human-in-the-loop necessity — Complex commercial claims require nuance, negotiation, and legal oversight—AI can assist but not fully replace adjusters yet.
- Integration challenges — Connecting claims systems to underwriting, policy admin, reinsurance, and external data sources remains technically difficult.
- Regulatory & compliance hurdles — Strict rules around data privacy, fair claims handling, and auditability slow experimentation.
- Cost & ROI concerns — Claims transformation requires significant upfront investment with benefits that accrue over years, making it less immediately appealing than underwriting tools.
The Path Forward in 2026
Insurers that close the claims gap stand to gain the most. Leading carriers are beginning to:
- Deploy AI for triage and straight-through processing on low-complexity claims.
- Use predictive analytics for early fraud detection and better reserve accuracy.
- Invest in digital ecosystems that unify underwriting, policy, and claims data.
- Partner with insurtechs for modular claims solutions.
As Ismail emphasizes, the next phase of commercial lines transformation will test carriers’ ability to extend digital maturity from the front end (underwriting) to the back end (claims) without sacrificing compliance or customer trust.
In summary, while commercial insurance is undergoing a tech-led renaissance in underwriting and pricing, claims processing remains the industry’s most stubborn blind spot—a drag on efficiency, profitability, and competitiveness. Closing this gap in 2026 will separate the leaders from the laggards.