Over the past few years, insurers have been inundated with new technology promising to transform everything from underwriting and risk selection to claims handling and customer service. The intent is right - technology clearly has the potential to make insurance more efficient, transparent and responsive - but many of these efforts fall short because vendors misunderstand how insurers actually work.
After nearly three decades in the sector, including senior roles at Aon and AIG, I've seen how often technology providers approach insurers with ready-made solutions rather than a genuine understanding of their challenges. The result is a widening gap between what insurers need and what they are being sold. The vendors that get it right come to the insurance industry with a clear vision on bringing people and AI together to deliver value to policy holders.
Too often, vendors begin with the product, not the problem. They arrive with polished demonstrations and promises of transformation without first grasping the realities of risk, regulation and legacy systems. Insurance is one of the most tightly controlled industries in the world; every process is shaped by compliance, capital and governance requirements built up over decades. What looks inefficient from the outside often reflects deliberate safeguards that protect both insurers and policyholders. When technology firms fail to appreciate this, even the most capable systems can struggle to gain traction.
There is also a tendency to underestimate how complex insurers' operating models have become. Few are starting from a clean sheet - they are balancing multiple legacy platforms, regulatory updates, cost pressures and, increasingly, skills shortages in key disciplines. What they need are pragmatic tools that reduce friction and improve decision-making, not grand digital visions that add more layers of complexity.
Cost and resource constraints have sharpened this focus. Insurers want technology that can deliver measurable results quickly - tools that free underwriters from administrative work, improve data quality and support faster, more accurate decisions, whilst at the same time providing underwriters with a great level of trust and confidence. Where technology can demonstrate clear operational gains, adoption follows. Where it cannot, enthusiasm fades.
At the same time, the industry is showing signs of what many now call innovation fatigue. After years of pilots, proof-of-concepts and competing platforms, there is growing scepticism about whether new systems will truly integrate or deliver value. Insurers are less interested in experiments and more interested in execution - technologies that can be deployed, scaled and audited with minimal disruption.
That shift demands a different approach from vendors. Instead of aiming to impress with innovation for its own sake, the focus should be on integration, interoperability and reliability. Insurers don't need to be dazzled by new features; they need confidence that the solution will fit into their existing frameworks, work with their data and stand up to regulatory scrutiny.
Another development changing the market is the rise of broker-built platforms and other bespoke systems created to manage placements and portfolios. These initiatives give brokers more control and flexibility, but they also add to the fragmentation of the insurance ecosystem. Vendors that only design for the carrier environment risk missing the broader picture. Real value now lies in connecting the dots - building solutions that can exchange data seamlessly across the insurance value chain.
AI, meanwhile, continues to dominate industry debate. It has huge potential to strengthen underwriting accuracy and claims efficiency, but only if it earns trust. Insurers must be able to explain and evidence every decision they make. Any model that operates as a 'black box' undermines that accountability. Transparency, auditability and control are fundamental design principles if AI is to become a lasting part of the insurance process.
Rebuilding confidence between insurers and technology providers will require a more measured dialogue. Insurers need to be open about the operational challenges they face, while vendors must be willing to listen before they sell. The goal should be focused on working together to solve defined problems rather than chasing transformation for its own sake.
Ultimately, technology's purpose in insurance is about helping people perform better rather than replacing them. The most successful solutions are those that enhance professional judgement, improve consistency and allow skilled teams to focus on the work that matters most. Proven success in claims automation and predictive analytics shows that leading vendors have a strong grasp of the challenges (re)insurers face and deliver solutions that enhance value for policyholders.
When technology is grounded in these principles and informed by a deep understanding of how insurers operate and the market conditions shaping their decisions, it ceases to be an abstract promise and becomes what the industry truly demands: a reliable catalyst for smarter, more resilient risk management.
