West Monroe warns US insurers lag tech
Many US insurers are stalling in their efforts to update technology systems, according to a West Monroe study. About 20 percent have set modernization goals but show minimal advancement, while another 12 percent remain in initial planning phases, and 2 percent have yet to begin. Nearly half of the surveyed firms rely on core platforms aged six to 10 years, with some systems operating for more than 15 years. Two-thirds of executives predict that cloud migration will take 3 to 7 additional years.
Maintaining old technology consumes significant resources. Over half of companies devote more than half of their IT budgets to supporting existing infrastructure rather than pursuing new initiatives. Budget pressures forced 52 percent to postpone or cancel two to three major projects within the past year. Resistance to change blocks artificial intelligence adoption, cited by 24 percent as the primary barrier, while 23 percent question AI value.
Claims departments lead generative AI testing at 30 percent, with underwriting units at 27 percent in early concept stages. Fewer than 5 percent expect measurable AI benefits next year. Real-time data remains unavailable for 41 percent of executives, slowing strategic decisions.
