Insurance industry finally ready for digital transformation – Novidea global report reveals

75% of insurance organisations worldwide are preparing to implement new core insurance management platforms in the next two years.

In the London Market, this timeframe is being accelerated to 2024 due to the arrival of Blueprint 2.0 – one of several key findings in a comprehensive new global report commissioned by Novidea, creator of the cloud-based, data-driven insurance management platform for brokers, agents, MGAs/MGUs, carriers, and wholesalers.

Currently, just 13% of brokers say they are ‘very ready’ to meet the standards needed to match new regulation and requirements surrounding upcoming Core Data Record (CDR) and Blueprint 2.0 developments.

The report, Legacy Out, Digitalization In: The State of Modern Insurance Technologies 2024, is based on data collected in a 2023 survey of 330 full-time, C-level insurance leaders across eight countries. The research underscores the struggle insurance organisations face with ageing, disparate technology that is difficult to manage, scale, and leverage to meet digital transformation needs. The average organisation manages six different insurance technology systems, and the average age of these systems is five years or older. Further, these leaders need help adequately training their employees to extract the most value from their technology systems, especially when staff work remotely.

“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. As the survey shows, there is a clear acknowledgment that current systems are ageing, disconnected, and do not support today’s digital demands,” said Roi Agababa, CEO of Novidea. “In the market, there is now a sense of urgency due to the Blueprint 2.0 mandates set for July 2024, which necessitates significant upgrades of legacy insurance tech stacks.”

To gain greater insight into technology usage for insurance providers, Novidea commissioned an international survey of C-level insurance employees, including CEOs, CTOs, CIOs, CFOs, and COOs. Respondents make business decisions for insurance brokers, MGAs, wholesalers, Lloyd’s Managing Agents, London Market brokers, and more. Countries included in the research include the United States, the United Kingdom, Singapore, France, Germany, Italy, Spain, and Australia.

Key data points from the report include:

• 76% of enterprise insurance organisations with more than 5k employees are juggling between 6-10 insurance technologies or more
• 41% of broker management platforms and policy administration systems were implemented 5-15 years ago
• Of the surprising 99% of global insurance organisations who said they have plans in place to change their core technology systems, 41% indicated that this upgrade will happen in the next 12 months. Another 34% said they will make technology changes by 2025
• 94.8% said it was ‘important’ or ‘very important’ to be able to grow their distribution paths via portals or APIs

When asked to identify their top challenges with their current technology systems, insurance leaders cited issues with data quality (41%), data privacy and security (35%), and scale (35%). CEOs in particular were more concerned about the ability to scale, with 50% citing scale as a top challenge, compared with 33% for the rest of the C-suite.

To learn more, download the complementary report here: Legacy Out, Digitalization In: The State of Modern Insurance Technologies 2024.