Reports abound that the U.S. P&C industry performed better than expected in 2025, with the combined ratio for many bread-and-butter lines falling below 100 for the first time in several years. Especially in auto insurance, claims were lower than expected -- a welcome relief amid a flood of bad news in the early post-pandemic era.

Many insurance companies are filing rate decreases in several states, but years of rate growth means there's still a tidy profit to be made. It's a good time to channel that profit into digital transformation of key insurance processes, because if there's one thing that insurers can count on, it's that eventually the market will turn in the other direction. In order to maintain lower combined ratios, carriers should invest in efficiency gains now.

1. Subrogation management: I would be remiss if I didn't tap the sign here. With lower claim volume, it's likely there are even fewer claims than normal under subrogation -- meaning that for companies looking to get ahead in the arms race, there will be minimal disruption and more time for aubro adjusters to get used to and embrace the workflow and detection improvements in modern platforms.

2. Submission ingestion: While consumers are probably less likely to be shopping around for insurance if rates are stable, the inexorable march of AI is creating an expectation that the days of filling out extended applications even by keyboard are dwindling. Now is a good time to get in on the ground floor with many of the AI-supported submission ingestion platforms on the market to reduce friction in customer onboarding in the future.

3. Updated data models: In the back half of 2025, I met several vendors offering updated, AI-supported data models covering various risks from fire to flood to nuclear verdicts to fraud. Considering the pace of change in the world over the past several years, the eye of the storm provides a unique opportunity to integrate these new data sources into an insurers' playbook, so that they're ready to respond to potential new hotspots if the lull in claims ceases.

There's another reason to make these tech upgrades now: These quick wins can go a long way toward improving the employee experience at your company. At a time when insurance carriers are also dealing with retirement-driven institutional knowledge leaving the industry, taking the opportunity to upgrade technology could extend the shelf life of your knowledge workers who will be required to train the next generation. That generation will also expect more modernized enterprise tech platforms and an AI-supported work experience as computing models shift. A little investment now can pay off in a big way as the always unpredictable macroeconomic environment around insurance changes.