Insurance Leaders Are Winning by Syncing Technology Overhauls With Operating Model Redesigns
Insurers posting stronger growth are aligning core system replacements with cloud and AI-native software foundations, according to new research from Majesco. The gap between market leaders and laggards is widening as legacy technology debt constrains data use, automation, and product speed.
The divide reflects a fundamental strategic difference. Leaders execute operating model change and core modernization as synchronized programs. Followers and laggards treat them as separate initiatives, limiting the value of either effort.
Legacy Debt Is a Drag on Every Function
Legacy systems create operational friction across customer service, product development, and underwriting. Manual workarounds reduce productivity. Institutional knowledge walks out the door as experienced staff retire. New technologies like generative AI and agentic AI sit unused because the foundation can't support them.
The cost compounds. Insurers struggle to extract insights from data, launch products quickly, or adapt to market shifts. What should be a competitive advantage becomes a strategic risk.
Six Strategic Initiatives Separate Leaders From the Rest
Insurers reporting stronger growth are significantly more engaged in:
- Innovation and new product development
- Channel expansion
- Core system replacement
- New business models
- Resource reallocation
These initiatives work together to create sustained growth rather than one-off transformation efforts.
Optimism About Business Model Change Is Declining
For the first time, sentiment around business model change has dropped across the industry. The reason: transformation complexity and the constraints imposed by legacy systems are mounting.
At the same time, investment in cloud and intelligent core platforms is accelerating. Insurers increasingly recognize that AI-enabled operating models require modern technology foundations to function.
What This Means for Your Organization
The research signals a critical choice. Insurers that modernize core systems while redesigning operations gain agility and operational efficiency. Those that defer either component fall further behind.
Understanding AI for Insurance and how Generative AI and LLM fit into modernization efforts is now table stakes for insurance leaders evaluating technology roadmaps.
The full report, "Leaders Reinventing Insurance: Strategic Focus on Business Operating Model and Technology Foundation," is available from Majesco.
Your membership also unlocks:
