The Future of Commercial P&C Insurance 2035
Tim Braasch
Senior Partner and Managing Director at Strategy& | Rainmaker | Founder | Investor
A Strategy& Market Point of View
By 2035, commercial property & casualty (P&C) insurance will no longer resemble today’s business of brokers submitting spreadsheets, underwriters keying into legacy systems, and claims adjusters chasing paper. Instead, the sector will be defined by AI-enabled underwriting, rebundled distribution, and a re-engineered capital and product toolkit. Pressure from climate volatility, cyber systemic events, and a globalized economy will force commercial insurers to reinvent both their operating models and their go-to-market approach.
The Operating Model of 2035: Front-to-Back, Digital-Native, Human-in-the-Loop
Commercial insurance will complete the shift from siloed functions toward value streams. Underwriting, claims, risk engineering, and broker service will run as integrated pods with cross-functional talent, real-time data, and explicit outcome ownership.
Underwriting becomes human-AI collaboration. Submissions flow through intelligent ingestion and enrichment engines; AI copilots propose triage, appetite fit, pricing suggestions, and wording benchmarks. Underwriters focus on negotiation, portfolio steering, and exceptions. By 2035, 70–80% of SME business will bind straight-through, mid-market submissions will be semi-automated, while large/specialty risks remain manually underwritten but with deep analytical augmentation.
Claims become “touch-right.” Simple claims settle instantly through parametric triggers or automated decisioning; complex claims are guided by AI summaries, litigation propensity scoring, and vendor optimization tools. Loss data flows back into pricing and prevention in real time.
Risk engineering shifts from survey to sensors. IoT, telematics, drones, and geospatial analytics replace periodic site visits. Clients consume prevention insights on digital portals, increasingly as a subscription service bundled into cover.
Capital and accumulation management are integrated into underwriting. Pricing decisions incorporate dynamic reinsurance and insurance-linked securities (ILS) capacity. Parametric and multi-line aggregate structures become routine.
The net result is an expense ratio reduced by 300–500 basis points, faster cycle times, and a tighter linkage between risk selection, pricing, and capital allocation.
Technology Foundations: Data, AI, and Modular Platforms
By 2035, insurers will have replaced patchwork cores with modular, API-first architectures. Three capabilities underpin competitiveness:
Data fabric — A persistent entity graph of clients, brokers, exposures, assets, and perils, enriched with external and real-time sources (climate models, cyber telemetry, supply chain data).
AI platform at scale — Standardized model registry, orchestration, and explainability services. Guardrails around bias, privacy, and model risk will be essential for regulatory legitimacy and broker trust.
Unified workbenches — Underwriters and claims handlers operate in single environments, integrating workflow, authority, analytics, and wording libraries.
Technology is no longer “support” but the production system of the insurer, continuously delivering products, decision engines, and process automation.
The Market and Distribution Model: Rebundled and Rebalanced
The way commercial insurance reaches clients will also be transformed:
Broker consolidation accelerates. By 2035, a small number of global brokers dominate complex corporate placements. Insurers treat them as strategic accounts, with shared data, SLAs, and joint product development.
MGAs and specialty wholesalers proliferate. MGAs capture niches that require speed, expertise, and bespoke product. Insurers act as capacity providers and portfolio managers of MGA panels.
Embedded and digital B2B distribution scales. For SME and mid-market, insurance is distributed via accounting software, construction platforms, logistics networks, and payment systems. Quote-bind-issue is API-driven, with risk prevention and cover integrated seamlessly into workflows.
Direct plays remain marginal outside SME, but insurers that master embedded channels and aggregators achieve disproportionate growth.
The Product Toolkit: Beyond Traditional Covers
The risk landscape of 2035 looks fundamentally different. Winners will compete not only on rate but on product and capacity innovation:
Climate & NatCat: Parametric weather and catastrophe products reduce dispute risk and provide rapid liquidity.
Cyber systemic: Modular covers combined with monitoring, incident response, and ecosystem services become mainstream; risk is shared with reinsurance and capital markets.
Transition risk: New products cover renewable infrastructure, carbon credits, performance guarantees, and energy-tech failures, blending engineering with insurance.
Structured and captive solutions: Large corporates increasingly demand tailored risk financing, making captive services and multi-line aggregate programs essential.
What Success Looks Like in 2035
The future commercial P&C insurer will exhibit four defining traits:
Front-to-back digital execution with human-AI collaboration at its core.
A modular, data-rich technology platform enabling continuous product and process innovation.
A diversified distribution model balancing broker dominance with MGA growth and embedded B2B ecosystems.
A capital and product toolkit capable of absorbing climate, cyber, and systemic risks, while offering corporates flexible risk financing.
Carriers that succeed will combine improved efficiency (expense ratios consistently below 25%), more stable profitability (combined ratios sustainably <95), and the ability to capture growth from new risk pools.
Implications for Today’s Leaders
The 2035 destination may feel distant, but the no-regret moves are immediate:
Launch AI-enabled underwriting pilots in SME and mid-market.
Rationalize broker relationships and prepare for embedded SME distribution.
Build parametric and cyber product capabilities.
Establish data foundations and AI governance now, before scaling.
Treat reinsurance and ILS as integral to the underwriting cycle.
The commercial P&C market of 2035 will be leaner, more data-driven, and more capital-market connected. The strategic choice for today’s carriers is clear: shape that future actively, or risk being disintermediated by those who do.