Social inflation, hybrid work arrangements, regulatory changes and technological advances are just some of the challenges facing carriers today, according to a new report by Gallagher Bassett.

Surveying 150 businesses to identify the top challenges for carriers across the globe, the findings highlight an emphasis on employee retention strategies, utilization of AI technologies and appropriately assessing underwriting risks to inform pricing decisions.

Data analytics and AI remain key opportunities for insurers to streamline operations and improve customer service, said Joe Berrios, managing director, Carrier Practice, Gallagher Bassett.

For all the opportunities there remain challenges, he said, including climate-related risks, regulatory concerns, supply chain delays and an increase in catastrophic claims.

Nearly two-thirds (67 percent) of carriers use generative AI chatbots in customer service, highlighting the industry’s increasing reliance on AI solutions.

In North America, nearly 40 percent of carriers report utilizing AI chatbots in claims processing.

One important concern is the ability to integrate AI seamlessly into a carrier’s operations.

A reported 75 percent of carriers said the biggest challenge in 2024 will be compliance and regulation related to data privacy and security.

Underwriting concerns centered on premium affordability and accuracy, market competition and technology.

Of those surveyed, 86 percent of carriers utilize climate data and analytics in their risk assessment and underwriting processes.

Nearly 70 percent of carriers in North America recognize the increasing nature of natural catastrophes.

The report predicts an increased interest in climate-specific insurance offerings.

Though some form of ESG principles implementation is being undertaken by a majority of carriers, many don’t see the benefit.

Claims is seen as the area where technology can provide the most value, according to the report.

Supply chain disruption and litigation are areas negatively impacting claims the most.

Some strategies to overcome supply chain disruptions include implementing digital claims processing, adjusting timeline for claims processing, expanding vendor networks and enhancing communication when dealing with this issue.

While respondents around the globe perceived litigated claims as resolving faster than in the past, that isn’t the case in the U.S.

North American carriers are relying on cost control experts to assist in controlling litigated claims costs.

Concerning talent management, 30 percent of carriers across the globe reported reduced employee engagement in hybrid work situations.

A large number (84 percent) of carriers say competitive salaries are the key to effective employee retention strategies.

Other top strategies include upskilling employees and retooling benefits.