Report: Legacy Tech is Holding Back Innovation and Change at Insurance Companies

Fewer than half of industry execs consider their companies 'advanced' in the main areas of business evolution.

Legacy technology systems and infrastructure are blocking the adoption of digital tools and new ways of working at insurance companies. That's the consensus of nearly half of the 200 insurance executives recently surveyed by EPAM Systems, a digital transformation services and product engineering company.

Additionally, more than one-third (39%) or all respondents representing both commercial and consumer lines said legacy technology is slowing innovation and change across the business, while 34% claimed it is preventing them from getting new products and services to market quickly. Fewer than half consider their companies "advanced" in the main areas of business evolution.

"This has been a challenge across the industry — regardless of market, class, and geography — and, despite significant progress on technology adoption, it remains the biggest drag factor for insurers," according to a new 24-page report produced by EPAM Systems and backed by London Research.

"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," Ian Wrigglesworth, chief technology officer at the insurance company Hiscox UK, said in the report, titled "Digital Modernization in the Insurance Industry: How to Drive Progress in Your Organization." "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."

The report covers the emergence of new technologies (including artificial intelligence), the integration of data and analytics into decision-making, and the shift toward more agile business practices, while also offering practical guidance for insurance companies "ready to take the next steps on their digital journey."

Read the full article here.

Access the report here.