Insurers likely to upgrade core management systems: Novidea

Insurance companies are likely to upgrade their core insurance management platforms in the next two years, according to research from Novidea, an insurance management platform. 

Legacy Out, Digitization In: The State of Modern Insurance Technologies 2024, includes insights from 330 insurance leaders across eight countries. The survey was conducted online during October last year by Global Surveyz Research, a global research firm.

On average insurers use about five systems for core processes like claims, billing, policy distribution and underwriting, according to the research. Three-fourths of the companies surveyed with more than 5,000 employees have six to 10 systems. 

Thirty-eight percent of respondents said their systems don’t have everything needed for insurance operations. Less than a quarter are supported in compliance by their current systems, and 77% say their technology only helps some of the time.

Eric Ayala, managing director, Novidea, shared a statement with Digital Insurance via email: 

“The data tells a story of insurance leaders who are at an important inflection point. They know that their legacy tech systems are holding them back from successfully transforming and modernizing. In the past, the fears of business interruptions or the costs of upgrading have outweighed the need for action, but that has all changed. The insurance market is too competitive, and customer expectations are too high for them to stay the same.”

Nearly, three-fourths of respondents said fears about updating their systems have held them back. The top reasons cited were cost, 48%, compatibility issues with existing systems, 42%, concerns about customer adoption, 38%, time to train, 30%, and fear of business interruption, 28%. When respondents were asked about the top challenges with their current technology systems, they said data quality, 41%, data privacy and security, 35%, and scale, 35%.