Insurance Technology’s Ugly Legacy

Insurance used to be a people business, but the legacy of insurance technology tells a different story.

Despite a decade-long focus on digital transformation, those projects don’t seem to have had a profound impact on the insurance ownership gap, which is widening across insurance segments and projected to reach $1.86 trillion by 2025, according to PwC. Meanwhile, insurance productivity has been mostly flat, according to McKinsey.

And while everyone talks about moving away from legacy and modern legacy systems, more than half of insurers responding to the "2022 Gartner CIO and Technology Executive Survey" said they are increasing funding for legacy application modernization.

Gartner forecast that global IT spending within insurance will grow to $271 billion in 2025, while retail spending will grow to an estimated $257.1 billion, but few people would argue insurance has kept pace with the advancements we’ve seen in retail, despite spending more.

So, what’s missing from those legacy and modern legacy systems that makes them so inherently limiting?