A new industry report outlines how legacy insurance systems are creating measurable operational and financial strain across underwriting, claims, and finance functions. The findings show that outdated platforms are no longer just inefficient. They are limiting insurers' ability to manage claims effectively, control costs, and respond to market demands.
For claims adjusters, the most immediate issue is the heavy reliance on manual workflows. According to the report, more than 50% of policy and claims-related processes still require human intervention, often supported by spreadsheets or disconnected systems. This creates delays in claim intake, investigation, and settlement, while increasing the risk of errors and inconsistent documentation. The report also notes that 72% of organizations rely on Excel or homegrown tools for critical workflows, which complicates data tracking and audit readiness.
The financial impact is significant. The report shows organizations are spending between $475,000 and $1.1 million annually on manual workarounds. Claims processing is specifically identified as one of the top areas requiring manual effort. These inefficiencies translate into longer cycle times, higher loss adjustment expenses, and reduced productivity for adjusters who are forced to manage administrative tasks instead of focusing on claim evaluation.
System fragmentation is another major concern. The report shows most insurers are operating across two to three core systems. This forces adjusters to switch between platforms, reconcile data manually, and manage incomplete information. The result is slower decision-making and limited visibility into claim status, reserves, and reinsurance recoverables.
Long implementation timelines compound the problem. The report notes that nearly 45% of insurers face system change cycles of 18 months or longer. For claims teams, this means delays in deploying new tools, updating workflows, or responding to regulatory changes. These delays can affect compliance, reporting accuracy, and the ability to adapt to catastrophe events or emerging risks.
The report also points to broader operational risks tied to what it calls 'operating model debt.' This includes disconnected claims, underwriting, and reinsurance systems that prevent real-time visibility into financial exposure. For adjusters, this can lead to delayed recoverables, inaccurate reserves, and challenges coordinating with reinsurers.
Modern platforms are presented as a solution, emphasizing automation, real-time data, and unified systems. These systems aim to reduce manual handling, improve claim accuracy, and provide better visibility across the claim lifecycle. Some newer platforms claim implementation timelines as short as three to six months, compared to legacy systems that take over a year.
For claims professionals, the takeaway is clear. Legacy systems are not just an IT issue. They directly impact claim speed, accuracy, and cost control. Reducing manual processes and improving system integration can lead to faster settlements, better data quality, and improved overall claim outcomes.
