Global survey finds majority of insurers will change technology platforms by 2025

Insurtech company, Novidea surveyed 330 senior leaders of insurance companies across eight countries recently to find out that, around the world, insurance companies are running systems which are sometimes up to 15 years old.

The company published the results January 23, saying 99 per cent of global insurance companies surveyed said they have plans in place to change their core technology systems. Of those who indicated as much, 41 per cent said the upgrade will happen in the next 12 months while 34 per cent said they will make technology changes by 2025. The survey did not reflect responses from Canada, but some companies here, being at very different stages of technological development, undoubtedly feel some of the same pressures. 

“Hesitations to upgrade technologies are increasingly outweighed by greater fears, such as falling behind the competition, lack of customer-centricity, regulatory risk or the inability to see true business growth and agility,” the report, Legacy Out, Digitalization In: The State of Modern Insurance Technologies 2024, states.

The survey found that 76 per cent of enterprise insurance organizations with more than 5,000 employees are juggling between six and 10 technologies or more. Insurance agency or broker management platforms and policy administration systems were implemented between five and 15 years ago 41 per cent of the time. More broadly, including smaller respondents, all on average were using five systems with 29 per cent saying they had six or more to contend with.

Top challenges with this include concerns about data quality, expressed by 41 per cent of respondents, data privacy and security were a concern for 35 per cent and the ability to scale was a concern for 35 per cent of respondents. When the data was segmented to include only CEO responses, 50 per cent cite scale as their top challenge.

Top reasons for not updating operations to more modern platforms include cost, compatibility issues, concerns about customer adoption, the time it takes to train employees and concerns about business interruption. The survey notably found that 96 per cent felt their employees cannot be optimally effective using their current technology stack; 50 per cent say remote access to legacy systems is also a challenge.

“Legacy technology systems are simply not designed for those who are not physically in place at the office and make effectively supporting operations and secure data access a real pain point,” they write.