OutSystems for insurance
Emerging technologies, societal changes, and evolving customer needs are just some of the factors forcing changes in the insurance space. Modern insurers are tasked with balancing shifting customer expectations with a quickly evolving technical landscape if they wish to stay competitive. There is also a growing push for insurers to contribute to societal value, offering products and services that ultimately benefit more than just their policyholders. Meanwhile, business interruptions loom at every turn, as rapidly changing risks and regulations pose added challenges.
In this blog, we’ll examine the top trends in the insurance industry that IT leaders need to be aware of to stay competitive, resilient, and ready to drive societal value in the face of change.
Cloud adoption and digital innovation
To keep up with the rapid pace of change in the industry, insurers are modernizing systems, moving to the cloud, and looking to drive digital innovation to stay ahead of the competition.
Out with the old
41% of insurance CIOs report that the limitation of legacy systems is the main barrier to technology success. Aging systems hinder innovation, leave insurers open to potential security risks, don’t integrate with newer technologies, and often require a highly specialized workforce for maintenance. As new technologies emerge, leading insurers are realizing the need to move away from legacy systems and embrace these leading-edge technologies that can help them work faster and more efficiently.
In with the new
Modernizing legacy systems is just part of the puzzle. In addition to bringing older systems into the future, IT leaders are increasingly looking at how to adopt new technologies to streamline processes, cut costs, and boost productivity. According to Gartner, insurance CIOs say the top three technologies with planned investment increases are generative AI (89%), cloud platforms (86%), and cyber/information security (86%).
Customer expectations are changing
Customer expectations for their insurers are higher than ever. From self-service options to hyper-personalized experiences, policyholders want more options for how they interact with insurers. They also want more flexibility in coverage and pricing based on their specific needs.
Trust is key
Simply providing policies and coverage isn’t enough—consumers want to work with insurers that they feel they can trust. As more cyber breaches and data leaks permeate the news cycle, customers want to know that their data is safe with whatever company they choose. The Gartner report mentioned previously indicates that 80% of insurance CIOs are currently investing in analytics and implementing new cyber/security measures to build consumer trust.
New business models take hold
Beyond trust, how customers interact with their insurer is changing. Whereas insurers used to operate in their own swimlanes, the boundaries between them are being dissolved by technological advancement and societal change. Consumers can now shop for and purchase complementary products all in one place, and insurance can even be embedded at the point of purchase for many products. It’s estimated that 30% of all global insurance transactions will happen in embedded channels by 2028.
Emerging tech and environmental, social, and governance (ESG) risks
Risks in the insurance space are constantly evolving, especially ESG-related risks from climate change to cybersecurity to emerging technology that requires robust governance. Insurers need to proactively manage the risks they know about while preparing for those they haven’t yet encountered.
New tech means new risks
Generative AI (GenAI) has the potential to transform underwriting, claims processing, and more. And there’s mounting pressure to deploy AI-embedded tech—fast. As IT leaders consider how best to leverage AI for their company’s benefit, they also need to consider potential risks from data breaches and the ensuing reputational fallout that comes with them. Discrimination and bias, regulatory issues, and potential legal issues are just some of the many factors that CIOs leveraging AI in insurance need to consider. However, it does appear that these risks are top of mind, with 68% of insurance CIOs saying that managing tech risk is a major focus area for 2025, per Gartner.
Tech risk is just one piece of the puzzle
While tech risks are prevalent and critically important, they’re not the only ones. Consumers, regulators, politicians, and investors are increasingly expecting insurers to help create more societal value. This presents a massive opportunity for insurers to adapt their products and business models to better serve the greater good, and 72% of insurance CEOs say that ESG is fully embedded in their business as a means to create value. However; tackling societal issues doesn’t come easily—as factors such as political regime changes, societal unrest, climate change, and more continue to put pressure on insurance companies.
Mounting competitive pressure
The rise of insurtech companies and the rapid pace at which technology are advancing that insurers are constantly forced to adapt to new tools to remain competitive. To stay ahead of the competition, insurance companies are looking to create agile environments that foster rapid innovation and delivery.
Rapid innovation is key
A recent PwC survey found that 31% of insurance leaders say they strongly agree and 55% say they somewhat agree that insurers will invest in innovation at a faster pace than what we have experienced in the last decade. GenAI is partly to thank for this strong industry commitment to moving faster than ever. In fact, 77% of industry executives say they need to adopt GenAI quickly to keep up with rivals who are already leveraging it.
Strategic partnerships will prove critical
To tackle many of the aforementioned insurance challenges, the right technology and the right partners will be critical.
“It may become increasingly necessary to partner with vendors that can provide carriers with the speed needed to meet customer and distributor demands and the flexibility to more efficiently adapt to economic, geopolitical, or climate-related turmoil.” —Deloitte
The right partners can help insurers deliver the highest quality products quickly, ensuring they stay competitive while balancing costs and risks. Particularly with the rise of new ecosystems and embedded insurance, the ability to rapidly deliver quality technical products that align with consumer needs is paramount.
“Culturally, leaders must emphasize the need to collaborate freely and iteratively. Design thinking, rapid prototyping and Agile ways of working will be hallmarks of embedded and ecosystem leaders.” —Ernst & Young
An ideal choice for innovation
As you look for the right partners to accelerate development in an industry that demands speed, security, and a superior experience, OutSystems is an ideal choice. The OutSystems AI-powered low-code platform enables IT leaders to innovate quickly with new applications, accelerate development, craft personalized digital experiences, and do it all securely. Learn more about how OutSystems can help insurers cut down development time, generate full-stack, secure, performant apps, and help scale them safely.
