In the rapidly evolving insurance industry, the need for modernization has become increasingly apparent. With the advent of new technologies and changing consumer expectations, insurance organizations around the world are gearing up to implement new core insurance management platforms. However, a recent survey reveals that the industry is not fully prepared to meet upcoming regulations and requirements surrounding Core Data Record (CDR) and Blueprint 2.0 developments.
Overview of the Report
The report titled “Legacy Out, Digitalization In: The State of Modern Insurance Technologies 2024” is based on data collected in a comprehensive 2023 survey of 330 full-time, C-level insurance leaders across eight countries. This extensive research provides valuable insights into the current state of insurance systems and sheds light on the challenges and opportunities in the industry.
Current State of Insurance Systems
According to the survey, the average insurance organization manages six different insurance technology systems, with the average age of these systems being five years or older. These aging systems are struggling to keep up with the demands of the digital age, leading to issues of disconnectedness and inadequate support for today’s digital requirements. Insurance leaders acknowledge the shortcomings of their current systems and recognize the need for transformation.
Urgency for Upgrades
The industry is now faced with a sense of urgency due to the upcoming Blueprint 2.0 mandates set for July 2024. These mandates call for significant upgrades of legacy insurance technology stacks. Alarmingly, only 13% of brokers surveyed consider themselves “very ready” to meet the standards required to comply with these regulations and requirements.
Challenges of Current Technology Systems
Insurance leaders have identified several challenges associated with their current technology systems. The most prominent issues include data quality, data privacy and security, and scalability. A significant 41% of respondents highlighted concerns regarding data quality, with 35% expressing apprehension about data privacy and security. Furthermore, 35% of insurance leaders reported limitations in scaling their existing systems to meet the evolving needs of their organizations.
Insurance Organizations’ Plans for Technology Upgrades
The report highlights an impressive 99% of global insurance organizations that have plans in place to change their core technology systems. Of these, 41% stated that the upgrade will occur within the next 12 months, indicating a growing sense of urgency among industry players. The need for technology upgrades is evident as organizations strive to enhance efficiency, improve customer experience, and stay competitive in the digital landscape.
Importance of Growth through Distribution Paths
A staggering 94.8% of insurance leaders emphasized the importance of growing distribution paths through portals or APIs. This highlights the industry’s recognition of the role that technology plays in expanding reach, improving accessibility, and meeting customer expectations. The ability to integrate with digital platforms and provide seamless experiences for policyholders is crucial for insurance organizations to thrive in today’s interconnected world.
As insurance organizations worldwide prepare to implement new core insurance management platforms, the legacy systems that have long supported the industry are being phased out. The survey findings present a sobering reality: despite the recognition of the need for transformation, insurance organizations are not fully prepared to meet upcoming regulations and requirements. However, the sense of urgency is growing, with a significant number of organizations planning to upgrade their technology systems within the next 12 months.
The implications of this report are clear: a digital transformation is inevitable for insurance organizations to remain relevant, competitive, and customer-centric in the modern era. Embracing new technologies, enhancing data quality and security measures, and prioritizing scalability will be essential for success. Insurance leaders must seize this opportunity to leverage technology as a strategic asset and drive the industry toward innovation and sustainable growth.