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RESEARCH REPORT

Digital Modernization in the Insurance Industry

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The insurance industry is conservative and prudent, and the technology investments from decades gone past is still at the heart of the core operations for most. Whilst previously a critical enabler, this now legacy technology has become a hindrance and can’t support the demands of a modern insurance business.

The traditional ways of working and the mindset that was successful in previous decades is under significant pressure to deliver more value to clients, shareholders, and employees alike. The state of play needs to evolve, and we wanted to explore this in more detail.

That’s why we partnered with London Research to survey 200 insurance executives in Europe to better understand the problems insurers are up against.

In this research report, you will learn:

  • The current challenges insurers face with legacy technology
  • The impact of technological trends on the overall business
  • Executives’ priorities – and progress – for modernization

Key Insights

Legacy Technology is the Biggest Hindrance to Moving Forward 

The single greatest barrier to the adoption of digital tools and new ways of working among insurance companies is legacy technology infrastructure. It’s a major barrier for almost half (45%) of the companies surveyed.

Over a third of respondents (39%) say it’s slowing innovation and change across the business, and a similar proportion (34%) say it’s stopping them getting new products to market quickly.

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New Tech Can Better Enable the Business

The wave of technological trends ushered in by 2023 has affected businesses across all industries. Insurance is no exception. Even across the insurance industry, there is little difference in how respondents perceive the impact of the various trends, highlighting the broad range of technology and business change initiatives that companies are having to contend with.

While adoption of data solutions has the biggest impact today, artificial intelligence dominates when it comes to future trends.

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AI is Making Waves - But Are Insurers Ready to Adopt It?

Almost three out of five respondents said that recent advances in AI are already having a significant impact on their business. Meanwhile, AI and machine learning are seen as the technology that will have the biggest effect on their business in the next five years by a third of respondents, the single most popular choice.

Its unsurprising executives feel this way given the benefits AI offers with hundreds of use cases to choose from. However, these newer capabilities can only start their journey with the right access to the business’s data and the necessary supporting infrastructure.

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Executives Understand the Value of Technology Enablement, But Investment is Slow to Follow

The industry recognizes at the board level that it needs to change its approach to technology, yet it lacks the funds to do so. It’s being held back by its risk-averse culture, the lack of a burning platform for change and the difficult relationship between business and IT functions.

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HEAR FROM OUR CONTRIBUTORS

"Like many insurers we have a number of legacy systems including a monolithic policy administration system, that we need to modernize and break down in order to better leverage data and provide the digital journeys that colleagues, customers and partners are looking for. A well-designed componentized architecture will also enable us to increase throughput and speed of change, as well as being easier to build out an API layer that enables easy partner integration.”


Ian Wrigglesworth
CTO, Hiscox UK

HEAR FROM OUR CONTRIBUTORS

"Insurance companies traditionally have risk-averse organizational cultures, so from a transformation perspective we have been followers rather than trailblazers. We can be trailblazers as well, and we’re looking at new technologies. We’re not only utilizing the cloud, but looking at connected cars, telematics, the metaverse, and already extensively using AI in terms of chatbots, personalization bots, for our internal employees for self-service, but also for our customers. But we also need to be very mindful about data security and privacy concerns. While everyone is excited about AI and machine learning, there should be guardrails in place in terms of data security, privacy, who can access our data and how it’s transferred, especially within our ecosystems.”

Natasha Davydova
CIO, AXA

HEAR FROM OUR CONTRIBUTORS

"The clear focus of the company is customer excellence. That means providing the customer with an experience that creates trust, because especially when it comes to insurance, a lot of personal data is being handled. This is an important part of our strategy to overcome this commodification of insurance, and it comes down to heavily emphasizing data quality. That is definitely key, because if the customer calls you, sends you mail, he wants to be sure that you have the right information at hand.”

Marcus Bitterlich
Head of Data and BI solutions, Zurich Insurance

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  • ABOUT THE AUTHORS

Ingo Weinem

VP, Global Co-Head of Insurance, EPAM

With over 30 years of solution sales experience, primarily in the financial services sector, Ingo’s expertise spans software engineering, financial planning, analytical CRM, security services, payments, operations, retail banking, wealth management and industrialization. Currently, he leads our insurance initiative, partnering with top clients to enhance and expand their businesses.

  • ABOUT THE AUTHORS

Stephen Holdstock

Insurance CTO, Technology Consulting, EPAM

Stephen brings over two decades of transformative IT leadership to the forefront of insurance technology. At EPAM, he's driving strategic change for our clients, blending 25 years of expertise with a digital-first engineering mindset with deep insights into the insurance sector. His highlights include roles as a Global Program Director at QBE and CTO at Lloyd's of London, where he helped lead major digital modernization initiatives. Fueled by a passion for improving insurance businesses, Stephen excels in leveraging cutting-edge technology to make the market more adaptable, data-fluid and client-focused.

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