‘Liquid underwriting’ system needed for modern interconnected risk – Celent

Traditional underwriting models are becoming increasingly misaligned with how modern risk behaves, with continuous volatility in geopolitical, technological, social and climate dynamics driving a need to move away from “static, point-in-time” decisions to a “continuous, signal-driven” approach.

This is according to the findings of a new report, released yesterday (16 February 2026) by research and advisory firm Celent – a GlobalData company – titled Liquid Underwriting, Transforming Underwriting into a Living System.

The report argued that given the interconnectivity of risks in the modern world, underwriters must utilise a system capable of “interpreting risk continuously, responding to events in real time and operating coherently within systemic uncertainty” – a system it christened “liquid underwriting”.

Report author Fábio Sarrico explained: “Risk no longer behaves like isolated events, it behaves like a system. If underwriting continues to assume stability in a world defined by fluidity, insurers will see volatility not only in loss ratios, but in strategic control, capital efficiency and trust. Liquid underwriting is the operational response to that reality.”

In essence, liquid underwriting seeks to replace fixed decisions – for example at policy submission or renewal – with ongoing analysis across the lifecycle of a policy.

The future of underwriting

The report recommended that those looking to implement such practices take a three layered approach – real time data collection, contextual and artificial intelligence-supported decision-making and intelligence-led portfolio management.

Sarrico pointed towards climate and political risks as examples of events which could change a portfolio profile in hours rather than months and for which quarterly or yearly risk analysis was insufficient.

He concluded: “Insurers are not facing a data shortage, they are facing a decision-coherence problem. Signals are everywhere, but underwriting systems were never designed to interpret them continuously or at portfolio level.

“Liquid underwriting is not an end state, it is an operating posture. The future of underwriting will not belong to those who try to eliminate complexity, but to those who can interpret it – continuously, coherently and at scale.”