Viewpoint: Driving Sustainable Underwriting Performance With Data and Discipline

International insurance markets are entering a new phase of the cycle. Rates have become increasingly competitive across the majority of businesses classes for some time, with recent market reports estimating that rates declined 4% in the fourth quarter of 2025 – the sixth consecutive quarter of moderation.

One notable exception is US casualty, where capacity constraints in certain classes of businesses and price increases in Q4 2025 have largely been driven by growing litigation funding, class actions and increasing court awards.

Across the broader market, however, capacity is strong and competition is healthy, which comes as no surprise after several years of rate increases and improved profitability. For underwriters, this is not a setback but a moment of opportunity: a chance to differentiate through expertise, deepen broker and client relationships, and deploy capital thoughtfully in areas where there is sustainable, long-term value.

In this environment, disciplined growth and technical underwriting expertise matter more than ever – and those who remain focused on fundamentals will be well positioned to come out on top.

Current Risk Landscape

Unlike with previous cycles, today’s underlying risk landscape is characterized by greater uncertainty across multiple vectors.

Geopolitical instability has affected energy costs and the price and availability of a range of goods and commodities. This is also affecting multiple lines of insurance – from property, transport and logistics and trade credit to political violence and terrorism and cyber coverage.

Read more: Iran War Could Raise Exposures for Global Terrorism, Political Violence Underwriters

Meanwhile, economic uncertainty has not only affected international trade and supply chains but has also put the brakes on investment and growth plans for a wide range of businesses.

Climate impacts continue to deliver market shocks. The growing volatility and severity of secondary perils such as flash flooding, wildfire and severe convective storms are making it increasingly challenging to model and price some natural catastrophe risks.

The first half of 2025 was the second costliest for insured losses to date, with California wildfires contributing half of the US$80 billion total – nearly double the 10-year average. The full-year total rose to US$107 billion, the sixth consecutive year of US$100 billion-plus losses, with US severe convective storms a major contributor to both the half-year and full-year totals.

Meanwhile, set against the exciting opportunities offered by generative AI models, there is the emerging risk of AI-driven losses. An increasing proportion of business risks these days are intangible, and the growth of AI risks will add significantly to those intangible exposures.

Responding to Uncertainty

Against this backdrop of uncertainty and volatility, risks have become more complex, more correlated and harder to assess and price.

In this environment, having a deep understanding of how risks interact and diversify within insurers’ portfolios has become an even more critical pillar of underwriting strategy, enabling sustainable, profitable growth while maintaining focus on exposure management and underwriting discipline.

Across Markel, this conviction has driven tangible investment. In recent years, the insurer has expanded its portfolio analytics team across the international business to drive improvements in pricing and modeling capabilities. The company also has recruited more portfolio managers to advise underwriters on more effective segmentation and portfolio adequacy as a whole.

This not only helps with maintaining underwriting discipline but also assists underwriters in identifying those areas where the business has better data insights than its peers and can grow profitably, and pinpoint those areas where we need to be more cautious in our appetite.

A lot of growth potential comes from recognizing where, as a business, you have product strength and expertise and understanding how you can push that into client sectors and territories where that product shelf may be lacking.

Embracing Technology

At the same time, data and technology are playing an increasingly significant role in driving growth and redefining what underwriting discipline looks like.

As traditional models struggle to keep pace with rapidly shifting exposures, carriers must rely on richer, more varied data sources and more advanced analytics to improve risk selection, pricing accuracy and portfolio management.

AI and automation are becoming essential tools, helping underwriters to process complex information faster, to identify emerging patterns and to respond more dynamically to changing conditions. Markel has embraced AI technology, particularly for data ingestion, and is now also starting to use it on the underwriting side.

This is assisting growth in several ways. For example, Markel’s transactional liability business uses a large language model developed for the legal sector to interrogate client data, which enables underwriting of smaller business – business that previously might have been unprofitable to write. Markel also is exploring how to use this tool in other liability classes.

Markel has also launched an AI product in Europe that is being used to scrape publicly available data which, when aligned with its pricing tool, enables the company to identity coverage gaps for individual companies and offer them quotes for policies to fill those gaps.

Investing for Long-Term, Sustainable Growth

In the current insurance market, set against a volatile economic landscape and risk environment, carriers’ long-term performance will be reliant on their willingness to invest in tools such as AI models, in underwriting, analytics and claims talent, and in data and analytics capabilities – rather than on their ability to compete for business volume on price alone.

These investments enable carriers to connect risk, underwriting and claims data into a single, integrated risk view. This leads to not only better pricing and portfolio optimization, but also more tailored solutions for clients navigating increasingly complex and dynamic exposures.

Markel’s profitable growth strategy is centered on deepening its relevance to brokers and clients – bringing more product into the markets where it has a presence, accelerating decision-making through e-trading, and investing in portfolio analytics so underwriters can act with speed and confidence.

Ultimately, however, insurers’ differentiators remains their people. Insurance is, and always will be, a relationship-driven business. By combining disciplined underwriting, advanced analytics and exceptional talent, the industry should deliver what matters most to clients: clarity, consistency and long-term partnership in an uncertain world.