In a huge industry movement, 75% of insurance organizations around the world are planning to replace their core insurance management platforms by 2025, according to a comprehensive global report commissioned by Novidea titled "Legacy Out, Digitalization In: The State of Modern Insurance Technologies 2024.''
The key findings of the report have been derived from a 2023 survey of 330 full-time C-level insurance leaders across eight countries. The digital transformation is particularly expected to be expedited in the London Market, with brokers there making the shift a year earlier, in 2024, influenced by the implementation of Blueprint 2.0.
Key Findings:
- The report discloses that 99% of global insurance organizations are set in motion to upgrade their core technology systems. 41% are planning upgrades within a year while an additional 34% are targeting by 2025.
- However, insurance leaders are facing a few challenges in their existing systems, i.e., data quality (41%), data privacy and security (35%), and scale (35%). Only 13% of brokers identify themselves 'very ready' to meet the standards as per the upcoming Core Data Record (CDR) and Blueprint 2.0 developments.
- London brokers are the front runners in digital transformation, with the report indicating an early switch in 2024 and the implementation of Blueprint 2.0 is driving this.
- Larger enterprise insurance companies with over 5,000 employees are facing difficulties while managing six to ten or more insurance technologies simultaneously. The struggle with dated technology is quite evident, with 41% of broker management platforms and policy administration systems implemented five to fifteen years ago.
- Despite the setbacks, insurance leaders hold high hopes about the future. They acknowledge the flaws nature of current systems and are making future-forward decisions to serve modern, digital-first customer.
- Training and Employee Readiness: Insurance leaders express challenges in adequately training their employees to extract the most value from existing technology systems, especially in remote work settings.
- The report states that insurance leaders envision to achieve at least a 14% comparable operating margin target. However, given the current market conditions in Mobile Networks, the target has been lowered to at least 13%.
Roi Agababa, CEO of Novidea, said, "The data shows that insurance leaders are ready to make future-forward decisions about the technological shift required to better meet customers' expectations of a modern, digital-first experience."
