The 2024 Earnix Industry Trends Report has revealed that the insurance sector faces pressing challenges with AI adoption, legacy system modernisation, and compliance pressures.
Earnix’s survey of 431 insurance executives shows 70% of insurers plan to deploy predictive AI models within two years, yet fewer than 30% have fully implemented AI today.
This gap underscores the slow progress in transitioning from traditional systems to advanced technology.
While insurers recognise AI’s potential for real-time decision-making, integrating it remains a challenge as many firms cite legacy tech as a primary barrier to transformation.
Compliance pressures continue to grow, with insurers worldwide prioritising regulatory investments. European and Australian insurers report heightened compliance concerns, driven by strict regulations such as Solvency II.
Almost half (49%) of insurers have incurred fines for compliance lapses, spurring renewed attention to regulatory tools and frameworks.
The Earnix report highlights insurers’ struggle with legacy infrastructure that hinders collaboration and innovation, with 47% of executives citing siloed systems as a significant impediment.
Insurers also face lengthy implementation timelines, with 58% reporting over five months needed to make rule changes—a timeframe that puts them at a disadvantage in the face of market demands. Updating underwriting rules remains complex, with only 30% able to make changes within three to four months.
Insurers are increasingly aware of these challenges and see modern technology as a way to stay competitive.
Read the full report here.
Copyright © 2024 InsurTech Analyst
