Amid a hard market characterized by high demand for insurance, limited supply, and evolving risks, brokers, insurers, and underwriters are under significant pressure to respond quickly, price policies accurately, and deliver seamless service—all while grappling with increasing workloads and stretched resources. In this challenging environment, insurtech tools are emerging as essential solutions, enabling brokers and insurers to streamline operations, address talent shortages, and stay competitive in a rapidly changing landscape.
However, implementing new processes is often easier said than done. According to Prateek Sangal (pictured), senior vice president and head of digital at AmTrust, old habits are hard to retrain. “The biggest challenge is getting people to change the way they work, especially when it comes to something as ambiguous as technology.”
Legacy systems and capturing valuable data
Legacy systems remain a significant part of the insurance industry. In fact, a report from Clearwater Analytics reveals that as much as 74% of insurance companies still rely on old tech to complete core functions. To make matters worse, up to 70% of insurers’ annual IT budgets are spent on maintaining this outdated technology.
What’s causing this hesitance to upgrade? Aside from concerns about high upfront costs and the fear of disrupting existing processes, a report from Bain & Company highlights another major challenge: insurers are struggling to extract insights from their technology investments. Only 5-10% of carriers are consistently capturing value from their data and technology initiatives. As the report summarized, analysing data and, more importantly, deriving useful insights from it, can be a big challenge for insurers.
In all fairness, insurtech solutions haven’t always presented data in the most user-friendly way. However, as the industry continues to grow, insurtech firms have significantly improved. Eric Rentsch, chief product officer at Zywave, highlighted that, over time, tech companies have become better at speaking the language of insurance and making their solutions more accessible and relevant to the industry’s needs.
Summarising this shift, he shared, “Each line of business has unique data, risk appetites, and motivations, requiring tailored pre-bind and post-bind strategies. While themes may align, solutions must be specialized. Many insurtech providers are now leaning into markets where they really have the expertise and knowledge to deliver significant value.”
Outsourcing tech: speed and accuracy
Sharing the advantages that outsourcing tech can offer, Rentsch noted that one of the biggest areas where tech can help brokerages is in improving their speed and accuracy. With talent shortages continuing to challenge the insurance sector, especially as experienced professionals approach retirement, an impact on workflows is inevitable. AI proves to be a valuable tool in filling this knowledge gap—not only by enhancing training and upskilling among existing employees, but also by streamlining recruitment processes and boosting employee productivity.
“AI can really help simplify tasks and enable employees to keep up with the growing demand for their talent,” Rentsch said. Sangal also sees potential in utilizing data to improve the claims process. “Settling claims is a huge opportunity for all insurers, including us, to leverage data in a completely new way, especially using technologies like generative AI,” he shared.
Despite the benefits of AI, 2025 likely won’t be the year of full AI activation for insurers. According to Don Okolie, global head of insurance underwriting practice at Genpact, the reality will likely involve a blend of traditional and new technologies.
“In 2025, we will see insurers increasingly adopt hybrid models, compatible with these legacy systems, that integrate digitization into their organizations, such as underwriting workbench solutions with embedded Gen AI and advanced analytics capabilities,” he confirmed.
How to successfully integrate insurtech into your brokerage
As more insurers and brokerages begin to incorporate technology into their business models, Sangal shared valuable tips to help business owners navigate the integration process.
- Start with narrow use cases: When adopting new technology, focus on specific, well-defined use cases. This allows you to test the tool’s effectiveness in a controlled environment and understand its potential impact without overwhelming your operations.
- Pilot the technology: Begin with a pilot program involving a small group of users who can experiment with the technology. This enables your team to evaluate its real-world application and identify any challenges early.
- Collect and incorporate feedback: Use insights from pilot users to fine-tune the implementation. Adjust the technology or processes based on this feedback to better align with your brokerage’s needs.
- Once the technology has been refined and proven effective in pilot programs, roll it out to the broader organization in phases. This approach ensures smoother adoption and minimizes disruption.
By following these steps, brokerages can set themselves up for success as they integrate new technologies. As Sangal emphasized, “AI is not going to replace brokers, but brokers who use AI will replace those who don’t. This really highlights the power of AI—it’s meant to work in synergy with human expertise.”
Leave a Reply