In 2023, insurance companies spent $210 billion on IT — largely to keep outdated legacy infrastructure running. With that figure projected to grow 9% annually through 2027, funding the status quo is increasingly unsustainable and inefficient.
Despite investing billions to maintain legacy systems, most insurers fail to take full advantage of the valuable data they hold. After decades of collecting information across claims, underwriting, policy administration, and distribution, many still struggle to access and apply it in ways that deliver true business value.
Data modernization offers a better path — not just to reduce costs, but to unlock the value of the data they already have. Modernization turns siloed information into a shared asset that supports faster decision-making, stronger alignment, and outcomes that are easier to measure and scale.
If your organization views data as a burden rather than a breakthrough, you're not alone. But it doesn't have to stay that way. Now is the time to pinpoint what's holding your organization back and start using data more strategically.
Why data modernization stalls
When data is accessible, contextualized, and consistently maintained, it becomes a powerful driver of business performance. You can apply it wherever your business needs it most, from personalizing policy recommendations to refining risk models. Modernized data pipelines, for example, can reduce claims cycle times by up to 30% and improve combined ratios by several points.
Well-maintained data also lays the foundation for the broader modernization of insurance tools and platforms — a shift that can help carriers increase revenue by as much as 25%. A commercial lines carrier, for example, can use data to help underwriters prioritize high-conversion quote requests, generating more premium for their efforts.
Yet many insurers remain stuck in early maturity stages — not for lack of tools but due to outdated mindsets. Insurers have long treated data as a byproduct of operations rather than a product in its own right. This perspective limits investment in the infrastructure, talent, and governance required to make data usable across the business.
Without a strong data foundation, carriers struggle to forecast risk with precision, often defaulting to historical snapshots instead of real-time insights. Even if data scientists are in place, their ability to deliver advanced modeling or predictive analytics is limited.
And while AI promises to transform core insurance functions like underwriting, claims triage, and fraud detection, that potential remains largely unrealized. In fact, 92% of organizations have encountered rollout challenges with generative AI, with data quality cited as a leading barrier. The tools to modernize are available — but without a shift in how data is valued and managed, they're rendered useless.
The first step toward meaningful transformation is reframing data as a core asset — one that's accessible across the organization, not confined to technical teams.
Three steps to modernize your data
Modernizing data requires a fundamental transformation in perspective and a clear road map to guide the way. Here are three ways to modernize data and reap the benefits that come with it.
1. Set the right foundation
Before investing in tools, clarify why you're modernizing your data in the first place. Are you aiming to improve forecasting? Reduce underwriting leakage? Accelerate claims turnaround? Define the strategic drivers for both your business and your data practices, and make them shared priorities that anchor every step of the work ahead.
Equally important is ensuring cross-functional alignment. While modernization may be executed by IT, it's fundamentally a business challenge — and you should approach it as such. Long-term success depends on standardized practices and establishing shared ownership and responsibilities from the start.
2. Democratize your data
Even the most advanced data systems fall flat if data can't be securely shared and used across the organization. To make modernization meaningful, data democratization must be a core part of your strategy — standardizing access, consumption, and accountability across business functions. This isn't just an IT initiative; it's a company-wide responsibility.
That starts with ensuring your data is:
- Accessible: Teams should be able to explore, query, and analyze data without submitting tickets or relying on IT. Most carriers have centralized data stores and user permission frameworks in place, but access alone doesn't guarantee usability.
- Contextualized: Employees across the organization need more than definitions of the data — offer guidance on how it varies across geographies, systems, and use cases. Adding quality scores, usage guidelines, and business rules help make data interpretable and trustworthy, even when it's imperfect.
- Versioned: Data without timestamps or update history is unreliable. It's essential to know when a dataset was last refreshed or whether different teams are working from the same source. Version control and lineage tracking help keep analysis aligned and decisions accurate.
When data is accessible, contextualized, and versioned, it becomes a useful product that every team can rely on to drive insight and action. This shift lays the groundwork for scalable, cross-functional decision-making grounded in shared understanding.
3. Make the cultural change
Too often, data remains siloed within IT, with little ownership or visibility across the business. Data must be treated as a collective responsibility that's woven into the workflows and priorities of every department.
That starts with redefining data as a product — not a passive byproduct. Business units must actively shape, maintain, and apply data, with accountability for its quality and relevance integrated into daily operations. This means building data literacy, monitoring quality at the point of origin, and empowering teams to take ownership. When those closest to the data also manage its context, it becomes more trusted, usable, and strategically valuable. In a sales-driven industry, data becomes a true differentiator when every team is equipped to act on it.
This cultural shift must start at the top. Executive buy-in is essential to sustaining the long-term effort modernization requires. The resources are there, and the tools exist. But without business-wide commitment, progress will stall and your data will remain a missed opportunity.
Unlock the full value of your data
Modernization is a business imperative that can't afford to be sidelined. When every department can interpret and act on data with confidence, the result is faster decision-making, more accurate risk assessments, and stronger customer outcomes.
You don't need perfect conditions to begin. What matters is committing to the structures, habits, and mindset that turn data into a business-wide advantage.
The connective tissue between your operations, your customers, and your competitive edge is data. The choice now is yours: will you move forward by assessing your data maturity and aligning modernization with underwriting and claims — or risk being left behind?
