Many parts of the insurance sector, which have previously been marred by legacy technology, are now undergoing rapid digital transformation. AI, automation, and embedded insurance are just some of the technologies driving change in everything from underwriting and claims to customer engagement, leading many industry firms and leaders to rethink their approach.
Throughout June, The Fintech Times has focused on all things insurtech, from the sector’s biggest emerging trends, to the features still lacking that customers are asking for. To conclude this month’s focus, we now look to the future.
Taking into account all of the factors, insights and themes we’ve looked at so far this month, it’s clear that insurance firms face a variety of challenges. So, how can they best prepare for the future?
To find out, we once again asked industry participants for their views. Here’s what they had to say.
Forgetting ‘AI for AI’s sake’
Aviad Pinkovezky, CEO of First Connect, an insurtech platform built for independent insurance agents, warns that firms need to carefully select where they use AI.
“Increased restrictions from traditional insurers are creating opportunities for niche players like Rainbow, which focuses specifically on restaurants. While these specialised companies can build substantial businesses by serving underserved niches, they face scaling challenges and distribution hurdles in reaching agents. This market fragmentation presents established insurers with a critical choice: compete on specialisation and tailored solutions or risk losing market share to more focused competitors.
“For technology preparation, firms should prioritise business problems and efficiency gains. Rather than pursuing ‘AI for AI’s sake’, insurers should start with clear, high-frequency business problems where AI can deliver immediate, measurable efficiency improvements, particularly in claims processing and customer service operations. This problem-first approach ensures technology investments generate tangible returns rather than impressive demonstrations.
“Starting with smaller, scalable experiments will allow firms to demonstrate value, build organisational confidence, and develop institutional learning before committing resources to larger initiatives. This approach reduces risk while building the foundation for more ambitious implementations.
“In addition, data strategy will be the critical foundation for future success. Companies must move beyond simply collecting data to actively cultivating it for useful insights. This includes exploring and investing in underutilised datasets and seeking strategic data partnerships to simplify collection processes, such as automated NAICS identification, while improving overall data quality.
“The convergence of these trends suggests successful insurance companies will combine technological sophistication with market specialisation. Those who can deliver more tailored, better-priced products through AI-enhanced operations while serving specific customer segments will be best positioned as the market becomes increasingly fragmented and competitive.”
Data-driven advice
Phil McGriskin, co-founder and CEO of Vitesse, a global treasury and payments provider for the insurance industry, shares some data highlighting the challenges facing insurance firms, and offers some advice.
“To prepare for the future, insurers must rethink the financial infrastructure behind claims – how they are assessed, funded, tracked, and settled. Our State of Claims Finance report makes clear that tracking funds is no longer a back-office task; it’s a strategic imperative.
“Thirty-one per cent of claims leaders say partner management is a top challenge, while data inconsistencies (36 per cent) and transparency issues (35 per cent) continue to slow coordination and decision-making. Add to that 66 per cent of insurers struggling to access funds in real time, and the need for change is clear.
“The most forward-thinking firms are adopting real-time dashboards that centralise visibility, optimise liquidity, and eliminate the need for reactive cash calls. These tools empower insurers to ensure capital is in the right place at the right time, improving both customer outcomes and financial control.
“Preparing for tomorrow means integrating finance, claims, and treasury into a more intelligent, connected operating model. By doing so, insurers can reduce risk, boost agility, and set the pace in a more complex, customer-driven market.”
Embracing the cloud
“Insurance firms must reimagine their operating models to capitalise on emerging digital opportunities,” added Daniel Cole, senior managing director at digital consulting company Publicis Sapient. “The key is building organisational agility through cross-functional teams that can rapidly test, learn, and iterate on customer journeys and propositions. This requires breaking down traditional silos and establishing collaborative ways of working that prioritise long-term customer value creation.
“Technology infrastructure transformation presents exciting possibilities. Insurers should migrate from legacy systems to cloud-native platforms that provide enhanced flexibility and speed, enabling them to deliver superior customer experiences. Modular, API-ready architectures unlock rapid integration opportunities with new data sources and support innovative cross-product development.
“Data strategy should be customer-centric, leveraging AI and analytics to create personalised experiences across the entire integrated media and customer journey. This means using intelligent insights to guide customers to optimal channels at the right moments, while focusing marketing investments on the most valuable customer segments.
“Successfully implementing these data-driven strategies requires the right people and capabilities. Talent acquisition and cultural transformation unlock significant competitive advantages. With evolving market demands, firms should invest in recruiting digital talent while upskilling existing teams in areas like digital marketing, data science, customer experience design, and agile product development methodologies.
“Finally, insurers should embrace strategic partnerships and ecosystem thinking. Rather than viewing industry convergence as disruptive, forward-thinking firms will collaborate with adjacent industries, fintech innovators, and technology companies to create comprehensive solutions that deliver exceptional value to customers in an increasingly connected world.”
Leaving legacy tech behind
Jamie Allsop, managing partner, financial services and insurance at HTEC, an AI-powered digital product design company, also stresses the importance of embracing new infrastructure and leaving legacy behind.
“Insurance companies must address their legacy technology debt as the foundation for future success. Organisations cannot continue spending most of their budgets simply maintaining existing systems; this approach is unsustainable. Companies need to transition away from mainframe-based systems that require weeks to implement changes and invest in modern architecture that enables rapid adaptation. This technological foundation is essential for remaining competitive against more agile financial technology companies.
“Customer experience must become the strategic priority. While insurance is largely a necessity purchase rather than something customers get excited about, superior customer experience creates sustainable competitive advantages. Companies have learned that acquiring customers through aggressive pricing often leads to unsustainable claims ratios when underwriting strategies prove inadequate. The more sustainable approach combines fair pricing with an exceptional customer experience that exceeds expectations.
“AI implementation requires careful strategic planning. Technology leaders must determine how to properly implement AI to achieve genuine benefits for both customer experience and operational cost reduction. However, this cannot be done without thoroughly considering compliance and security implications, particularly in regulated sectors. Strategic differentiation through custom solutions offers significant advantages over standard industry platforms. Our clients want to differentiate themselves in the market, they believe their competitive advantage comes from unique underwriting and pricing capabilities. Using industry-standard systems limits this differentiation potential, which is why building custom intellectual property often provides better market positioning.
“Success requires balancing multiple priorities: addressing technical debt while meeting business demands, implementing cost optimisation while investing in customer experience, and adopting innovative technologies while maintaining regulatory compliance and operational stability.”
Embracing AI
“AI isn’t going anywhere anytime soon, and insurance firms need to be prepared to scale with the technology as it grows and adapts,” adds Andre Gagne, CEO at digital transformation company GFT Canada. “This means beginning now to introduce AI into everyday processes.
“While it’s important to make sure data infrastructures and employees are ready for AI, there will never be the perfect time to begin. Insurers should begin rolling out initial AI use cases with smaller test pools that limit risk to lay a strong AI foundation.
“Equally important is the customer experience. As digital expectations rise, insurers that use technology to create seamless, personalised, and responsive customer journeys will stand out. This includes everything from fast, transparent claims handling to modern payment experiences. New tech players like OneInc are helping insurers integrate emerging payment solutions into the insurance ecosystem, enabling smoother premium collection, vendor payments, and claims disbursement. Forward-thinking insurers are already leveraging these capabilities to improve satisfaction and retention.
“Throughout every step of this modernisation process, insurers need to ensure they are still thinking of the bigger picture. True AI adoption across the business requires technology, change management, governance frameworks and more for it to make a tangible change. It’s more complex than a simple shift, and organisations should analyse where in their business the tech will make the most impact.”
