Survey Shows Widespread Frustration With Legacy Platforms
The survey found that 95% of insurance professionals face “significant” challenges with their existing legacy core technology platforms. Data-related concerns ranked as the most pressing issues. Respondents cited data security and privacy as the top challenge at 35%, followed by data quality at 33%. Additionally, leaders highlighted high upgrade costs at 32% and high maintenance costs at 26%. They also reported integration difficulties at a rate of 25%.
Novidea described these results as evidence of an urgent need for technological modernization across the insurance industry. The company stated that the report is especially relevant for organizations planning to acquire a new core platform or replace modules in their current systems over the next one to three years.
Leaders Plan Near-Term Technology Change
Although leaders reported facing steep challenges, many also stated that they plan to take action. The survey found that 73% of insurance executives plan to upgrade their core insurance management technology within the next three years.
Among those leaders planning for change, the report revealed two primary approaches. First, 40% are considering a total “rip and replace” of their existing platform. Second, 60% prefer an incremental approach and plan to replace specific modules rather than the entire system.
Firms Target Specific Modules for Replacement
For leaders taking a module-by-module approach, the survey identified the areas most likely to change. Document management ranked as the top module targeted for replacement at 31%. Next, contract builder followed at 29%. Placing platform and claims management tied at 27% each. These results highlight the workflow areas that leaders perceive as most in need of modernization.
Change Projects Face Investment and Internal Barriers
The report also outlined the most prominent obstacles leaders face when trying to execute change projects. Respondents cited lack of investment in new technologies as the top barrier at 27%. Employee resistance to change followed at 23%.
Novidea added detail on where resistance appears most strongly. Of executives who identified employee resistance as a top barrier, most came from small and mid-sized insurance organizations. Only 15% of respondents from companies with more than 5,000 employees selected employee resistance as a leading issue.
Existing Processes Create Multiple Operational Issues
Nearly all respondents said their current processes create problems. Specifically, 99% reported multiple issues tied to existing workflows. The most frequently cited problems were analytical reporting and visualization, at 26%, and claims tracking, at 26%. These findings demonstrate that operational friction extends beyond the core platform itself and into daily work activities.
Survey Highlights Current AI Enablement
The report asked leaders whether their insurance management platform enables them to utilize AI benefits. In response, 71% said their platform enables them to benefit significantly from AI. Another 28% said they benefit somewhat. Only 1% reported no benefit.
The survey also found that larger insurance organizations derive greater value from AI capabilities than smaller firms, indicating that larger players tend to lead in AI integration. At the same time, the report stated that every organization, regardless of size, must maintain accurate data.
Novidea Perspective on Industry Modernization
Julie Shafiki, Chief Marketing Officer at Novidea, said the findings show the insurance industry at a major technological crossroads. She noted that many leaders recognize the need to modernize and are planning changes. However, she also noted that they face barriers, including concerns about system compatibility and internal resistance.
Shafiki stated that Novidea aims to reduce these pressures by offering a cloud-native, end-to-end insurance management platform with open APIs. She said the platform is designed to address common barriers to transformation and to bring value to customers as they grow their business.
Novidea has the full report available for download through its website.
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