Why Insurers Are Falling Behind in Tech

"Insurance doesn’t have a Technology problem; it has a technology ecosystem problem." Michael Witte, CEO of EqualParts, shared this sentiment today with me. I haven't been able to shake it. We're awash in insurtech solutions: AI for underwriting blockchain for claims IoT for risk assessment and on and on. Yet, the industry often feels like it's running on isolated islands, not a cohesive, powerful continent. We're not lacking innovation. We're lacking integration. Think about it: * Data silos prevent a 360-degree customer view. * Legacy systems resist modern APIs, hindering seamless workflows. * Point solutions fail to communicate, leading to duplicated effort and missed opportunities. The real challenge isn't building more tech. It's building the bridges that connect the tech we already have. What if: * Underwriting AI could instantly access real-time IoT data? * Claims processing could be automatically triggered by blockchain-verified events? * Customer portals could seamlessly integrate with personalized risk management tools? This isn't just about efficiency. It's about unlocking the true potential of insurance to provide proactive, personalized, and truly transformative value. Let's shift our focus from individual tech solutions to building a robust, interconnected ecosystem. Let's talk about APIs, data standards, and strategic partnerships. What are your thoughts? How can we move from fragmented tech to a truly integrated insurance ecosystem? InsurTech ATX + Husch Blackwell

Most insurance companies will fail the AI test, but not for the reasons you think. At Insurtech Insights Europe, Lemonade’s CEO said something that stuck with me: Most insurers will fail the AI test not because they lack the tech, but because their culture isn’t ready. And honestly? That hits close to home. In insurance, we’ve gotten really good at adding tools without asking whether our teams, processes, or mindset are ready for them. We treat AI like it’s a plug-and-play solution. Drop it into underwriting, automate a few workflows, done. But AI doesn’t work like that. It learns. It adapts. It needs feedback, structure, and trust. And that doesn’t happen in companies where AI is siloed in IT or innovation labs, far from the business it’s supposed to transform. The companies that pass the AI test won’t be the ones with the flashiest pilots. They’ll be the ones that treat AI like a teammate, not a tool. Who builds systems that know when to step in, when to step aside, and how to evolve? That’s the real challenge and opportunity ahead of us. P.S. This is something we think about a lot at DHA-1, Inc, especially how AI and human judgment can work better together. If you’re exploring this space, happy to swap notes. #Insurance #Insurtech #RiskManagement #AIinInsurance #DigitalTransformation #InsuranceInnovation

Insurance companies are operating like it's 1995. Here's how to fix it: The last time I bought a policy: • Filled out a clunky form • Answered questions from memory • Got a rate based on data I typed in once That same data underwrites me for 12 months. No updates. No context. No acknowledgment that life changes. Meanwhile, everything else is dynamic: → My watch tracks heart rate continuously → My car reports driving habits in real-time → My bank sees spending as it happens But insurance is still stuck in static data hell. Here's the massive opportunity I'm seeing: 𝗥𝗲𝗮𝗹-𝘁𝗶𝗺𝗲, 𝗼𝗯𝗷𝗲𝗰𝘁𝗶𝘃𝗲 𝗱𝗮𝘁𝗮 𝘁𝗵𝗮𝘁 𝗯𝗲𝗻𝗲𝗳𝗶𝘁𝘀 𝗲𝘃𝗲𝗿𝘆𝗼𝗻𝗲. Insurers get better underwriting and fraud detection. Consumers get fair pricing and actionable insights. 10 ideas I'd build (or help build): 1. APIs for embedded behavioral insurance 2. Disability insurance tracking burnout signals 3. Pet insurance using GPS and vet data for fair pricing 4. Fleet coverage updating on real-time driving behavior 5. Risk prevention tools that stop claims before they happen 6. Credit protection based on cash flow, not just credit scores 7. Crop insurance with microclimate sensors and satellite data 8. Wearables-based life insurance rewarding sleep and movement 9. Smart home insurance that adjusts for water usage and occupancy 10. SMB coverage monitoring QuickBooks and Slack for operational risk The space is wide open. Traditional carriers are too slow to innovate. This is where the next billion-dollar insurance companies get built.

AI isn’t just another buzzword anymore - it’s actively reshaping how insurers assess risk, process claims, and enhance underwriting. But not everything is roses. On the plus side, according to Digital Insurance's 2025 Report: ✅ 78% of insurers are increasing tech spend in 2025 ✅ AI and machine learning are the #1 priority for digital transformation ✅ Underwriting, claims, and customer service are the biggest opportunities for automation Yet, despite all the AI hype, most insurers still aren’t seeing real impact: ❌ Only 30% of insurers have actually deployed generative AI. ❌ Many underwriting teams are still bogged down by legacy systems and manual reviews. So what’s the real issue? Too many AI initiatives in insurance start as pilots that never scale. Insurers invest in AI tools but struggle to integrate them into real underwriting workflows. They want AI that helps underwriters make better decisions—not just another black-box system that no one trusts or uses. The insurers that get this right won’t just bolt on AI to a niche use case and call it a day – they’ll use it to streamline underwriting workflows across LOBs, focus underwriters on the most winnable submissions, and surface hidden exposures that impact risk selection. Those are the insurers who will drive profitable growth. The real question isn’t whether insurers are investing in AI – it’s whether they’re investing in AI that actually works. #ai #insurance

The insurance industry is at threat... More than ever ! I recently had a discussion with an incumbent on where the InsurTech ecosystem stands. While funding is down, startups have downsized their teams and several exits were realized for lack of anything better, several players from the first wave of insurance innovation have achieved nice scales ! We agreed we couldn't speak of a "disruption" like several challengers had claimed years ago. We then discussed whether this implies it will never happen, or if it simply hasn’t happened yet. To me, there are three trends currently supporting the need for incumbents to explore how technology could add value to the insurance value chain. First, on the top line: prices cannot surge forever. In the last 2-3 years incumbents increased prices due to a high level of inflation Worldwide. But things are rather down to the historical trend and insurers will need to find additional levers to fuel their growth. I believe technology - as a means - could help them explore new market opportunities and keep growing, beyond just rising prices. Which is how to solve "the innovator's dilemma": expand existing products to new customers segments ; or, develop new products to existing customer pools. Second, on the bottom line, operational efficiency remains a challenge. As much as most of incumbents have claimed it publicly ! Technology could obviously help on being more efficient with existing processes. Change - or transformation - could help too by designing new processes. While AI is gaining momentum and redefining how companies could be ran with AI agents for instance. This could be a game changer, beyond simply leveraging these technologies in several parts of the value chain. It could revamp business functions at all. Third, in the medium to long term: new threats are rising and could threaten the insurance industry as a whole. These are new - or emerging - risks. Think about climate risks, cyber risks, financial fraud, the switch to electric vehicles, health longevity or digital assets. Most didn't exist in the recent past. Which means re/insurers lack historical data. And most are growing fast. Which means there's a need to address them. Retreat is an option. But for sure, this is not sustainable. Neither economically, nore societally speaking. In that background, data, algorithm, technology would be required to better understand, price, prevent and mitigate these risks. This is where technology could help build resilience. Overall, I believe the need for innovation in insurance has never been greater. Interestingly, we start spoting two kinds of players in the market: those exploring how technology and innovation could help address the above challenges. Which doesn't mean that every technology - or every startup - is worth it. And those dismantling their innovation teams, their investment capacities or even their ecosystem of startups. #insurance #insurtech #venturecapital

"The advantage insurtech startups have is they have more data than the incumbents." - Paraphrased (and subtweeted) Yes, there are some startups with some unique data, like that generated by new kinds of sensors and some of the cyber monitoring. But carriers, especially those with decades of countrywide experience, have a vast sea of data for huge numbers of policyholders. They also have many, many data scientists, actuaries, and analysts to make it usable. Orders of magnitude more data than even large startups. If it's been measurable for a while, they probably already have it. Lack of data is not why insurance innovation is hard. It's not why insurtech has not revolutionized the industry (yet?). Here's what does make improving insurance hard: 🗣 Human factors 🗣 ⚠ Large, complex organizations that slow decision making and hinder communication ⚠ Cautious, conservative corporate cultures (a good thing, until it's not) ⚠ An aging distribution workforce (in the IA channel), deeply knowledgeable people retiring, and difficulty recruiting younger people ⚠ A long history of unsuccessful innovation projects without a Silicon Valley-like tolerance for failure 💰 Economic factors 💰 ⚠ Large, stable, cash generating renewal books (disruption of any sort is usually cash flow negative) ⚠ Fragmented, highly competitive market with high cost of acquisition (paired with higher loss ratios for newer business), so protecting the renewal book is paramount ⚠ Increasing costs of reinsurance related to global economic conditions and climate change are among the most pressing problems, not well addressed by most innovation ⚠ Easier, more certain levers to pull vs innovation, especially in the difficult insurance markets of the last few years (rate increases, coverage reduction, nonrenewal, etc.) ⚠ Social inflation and litigation financing driving higher claims outcomes; also difficult to address with tech innovation Insurance people, what did I miss? #Insurance #Insurtech #InsuranceInnovation

You’ve invested in cloud. You’ve automated workflows. You’ve launched portals and dashboards. But something still isn’t clicking. 👉 If your tech upgrades aren’t delivering the traction you expected—this post is for you. Most insurance orgs aren’t facing a tech problem. They’re facing a coordination problem. When IT moves without operational alignment, you get: → Burned out teams stuck in firefighting mode → Delayed outcomes from disconnected priorities → Tools that check the box—but miss the business impact That’s not just inefficiency. That’s inertia disguised as innovation. In my latest article, I break down: • The hidden friction slowing down transformation • Why legacy methods still dominate despite “digital upgrades” • The cultural shifts needed to make real progress • Why alignment—not architecture—is your competitive edge If you're serious about building an agile, future-ready insurance business—don’t skip this read 👇 #insurance #businessoperations #digitaltransformation #futureready