A 2024 Novidea survey found that 41% of insurance professionals admit their core systems haven’t been updated in over five years. Even more concerning, 76% of large companies (with 5,000+ employees) rely on six or more systems, and nearly a fifth operate with 10+ systems. This tangled web of outdated technology isn’t just inefficient—it creates serious issues around data quality, security, and scalability.
The Industry Recognises the Need for Change—But Many Are Hesitant
Despite the clear risks, 74% of insurance executives have been holding back from making the switch. However, two key factors are now accelerating digital transformation across the industry:
- AI Adoption – While AI comes with plenty of hype, insurers are beginning to understand that without a solid digital foundation and structured data, they won’t be able to capitalise on AI’s potential.
- The London Market’s Influence – With Lloyd’s leading the charge in digital transformation, brokers and insurers are realising they need to follow suit to stay competitive.
The Cost of Sticking with Legacy Systems
For many insurers, data quality and security are top concerns. In an industry that relies on efficiency, precision and compliance, it’s surprising how many processes are still manual or spreadsheet-based—introducing unnecessary risks of human error and regulatory challenges.
This is often the starting point for brokers, MGAs and insurers looking to modernise. Cloud-based core platforms, like those built on Salesforce, offer best-in-class security and seamless data integration, eliminating the vulnerabilities that come with legacy systems. But security is just the beginning—modern platforms also unlock operational efficiencies that can transform business performance.
Efficiency: The Defining Challenge in 2025
There is pressure from all sides. The increasing frequency of natural catastrophe (Nat Cat) events demands rapid and comprehensive responses, while rising consumer expectations—driven by digital-first companies—are reshaping service expectations.
Internally, businesses are also grappling with inefficient processes that slow down growth. Too many employees spend time on manual workflows that could be automated, limiting their ability to underwrite more risks, distribute more products, and scale effectively.
Managing Multiple Systems: A Hidden Challenge
While the insurtech market offers many solutions, multiple disconnected systems create their own inefficiencies. Novidea’s research found that nearly a fifth of large organisations use more than 10 different systems, making data security, workflow integration, and overall efficiency difficult to manage.
Instead of layering on more standalone applications, insurance organisations should consider an integrated platform. This eliminates the risks of fragmented data, improves compliance, and streamlines operations—without sacrificing flexibility.
Why DIY Digital Transformation Hasn’t Worked
Many have attempted to build their own digital architecture, only to find it costly and time-consuming. Hiring and retaining top insurtech talent is a challenge, and many internal teams lack the specialised expertise to create a seamless, future-proof system.
A hybrid approach—where businesses retain elements of their homegrown systems while integrating with a scalable platform—often makes the most sense. By leveraging technology that has been iterated and optimised over years, insurers can accelerate transformation while reducing the risks and costs of a fully custom-built system.
Building for the Future: More Than Just Plug-and-Play
True digital transformation isn’t just about installing new software—it’s about rethinking the entire ecosystem to meet both current and future needs.
- Target Operating Model – How will the system function from an operational standpoint?
- Applications & Architecture – What technology is required to support this model?
- User Access & Compliance – Who needs access to what? How do you ensure regulatory compliance and data governance?
A 360-degree, real-time view of data and processes is essential. In the past, brokers, MGAs and insurers had to wait until the end of the month to assess claims, renewals, or financials. Today, modern platforms provide live insights across the entire business, enabling leaders to make informed decisions in real time.
Preparing for Tomorrow’s Challenges
Beyond solving today’s inefficiencies, insurers must invest in scalable systems and the right people to manage them. Digital transformation isn’t just about buying technology—it’s about investing in people and a future-ready business model.
Many hesitate to make the leap, thinking they can “hold out” for another year. But transformation is not just about solving today’s problems—it’s about future-proofing operations. The real shift happens when organisations start thinking beyond their current challenges and reimagining their business for the years ahead.
The Road Ahead
Looking ahead, the pace of change will only accelerate. Whether adapting to climate change risks, evolving regulations, or increasing customer expectations, the ability to process claims quickly, manage risk efficiently, and make data-driven decisions will determine the market leaders.
Recent wildfires in California, for example, highlight just how critical this is. As extreme weather events become more frequent, the industry must be prepared to handle a surge in claims processing at scale. The industry can no longer afford to be reactive—proactive investment in technology is essential.
At Novidea, we understand that no two insurers, MGAs, or brokers are the same. That’s why we’ve built a flexible, future-proofed platform that can be tailored to unique market needs. With a global team of 300+ experts, two-thirds of whom are dedicated to R&D, we are committed to helping our customers navigate digital transformation—not just for today, but for the future.
Reach out now to see how we can help you.