I'm not here to scare anyone by saying, "Tech will replace all insurance professionals." That line is boring now.

What I want to talk about is something else: Tech may not replace your job immediately, but it is slowly replacing your worth in the system.

We are entering a phase where some changes in insurance are no longer a choice. They are inevitable. I call this "inevitablism" in insurance.

What Is Inevitablism?

Inevitablism in insurance refers to the mindset that certain industry shifts — such as automation, AI adoption, data-driven decision-making, and modernization of legacy systems — are not optional but unavoidable.

It's the belief that these changes will happen regardless of current comfort, resistance, or preparedness, and that insurers must adapt rather than delay, because the future will arrive with to without them.

Tech vs Talent: The Usage Gap

There is no shortage of talent in insurance. The real problem is how that talent is being used.

Across the industry, many bright professionals spend their day on low-value tasks:

• Moving data between systems
• Updating spreadsheets
• Chasing documents
• Sitting in the same recurring meeting.

They are capable of designing better products, rethinking portfolios, and solving complex risk problems. But because technology inside many insurers is underused or outdated, people become the "glue" holding legacy processes together.

And let's be honest — we all know insurance adopts technology at a speed of 0.1× compared with the rest of the world. When the world is moving toward no-code workflows, instant software creation, and autonomous systems, insurers are only now preparing to give GenAI controlled access to production environments.

The gap is not just between tech and customers; it is between tech and talent.

Instead of using technology to free people for higher-value work, we often use people to compensate for the lack of technology. That's where the fear of AI comes from. It's not just, "Will AI replace my work?" It's also, "Have we allowed our roles to become so basic that any decent system could replace them?"

The Age of Innovation

We are already in a world shaped by Web 3.0, emerging platforms and decentralized technologies. Bitcoin's rise is just one signal of how digital value and infrastructure are shifting. On top of this, AI is accelerating innovation at a speed the industry has never seen before.

In this environment, insurers do not have the option to "wait and watch". They will be forced to adopt technology and create products that match how people actually live, work and transact today.

Innovation will not grow linearly; it will grow exponentially with the help of AI.

Automation will not be a luxury; it will be a necessity.

With open-source AI tools, startups can build, iterate and launch at a fraction of the cost and time. This new tech wave can easily create the next 10 major insurance players for the world—born digital, data-native and globally connected from day one.

In the future, most people will have their own AI agent helping them choose the right policies from hundreds of options. Most interactions—advice, onboarding, even parts of claims—could happen through VR or AR environments, especially for complex or high-value risks.

Behind the scenes, risk and portfolio decisions will rely on far more computing power than today, with advanced simulation and optimization. At the same time, connections between insurance and reinsurance will become more streamlined, with better data-sharing, real-time insights, and smarter capital allocation.

Leadership Choices in a Legacy World

Some leaders still believe that sticking to legacy systems and old processes is the safest path. They focus on short-term stability, minimal change and being answerable upwards, rather than looking ahead.

And this creates another silent problem — there is no real plan to make the transition easier for the next generation of leaders. Very few leaders think 10 years ahead. They avoid solving foundational issues like unstructured data, fragmented systems, or outdated architecture. But if today's leaders don't streamline data, modernize infrastructure, and clean the technical debt, how will the next leader build, innovate, or scale?

Without this groundwork, every new initiative becomes a retrofit, every improvement becomes a patch.

On top of that, most organizations don't have a clear plan to upskill employees before introducing new technology. Instead of preparing talent for next-level work, new tools get dropped in suddenly. This creates anxiety, resistance, and the fear of being replaced. A thoughtful, long-term upskilling roadmap not only protects employees — it empowers them to drive the transition and elevate the organization to its next stage.

Others think long term. They understand that the next generation of executives will not just "manage operations" but will be expected to embrace innovation, work with AI and data fluently, and redesign how insurance is delivered.

The organizations that win will be the ones where leaders:

• Invest in modern platforms instead of patching legacy systems forever
• Empower teams to experiment, automate and simplify
• Build long-term upskilling plans so employees grow with the technology
• Prepare future executives to operate in a world where AI, Web 3.0 and virtual interactions are normal, not experimental

The choice is simple: either leadership shapes the transition, or the transition happens to them.

A Future No One Wants to Miss

If we get this right, the future of insurance is not something to fear—it's a future no one will want to miss.

Insurance will work much more globally than it does today. Risks will not only be priced and held locally; they can be pooled globally, with capital, data and exposure flowing more smoothly across borders.

With the help of Web 3.0 and digital identity, we may see unique decentralized IDs created for individuals, businesses and even digital assets. These IDs can carry verified risk information, claims history, behavior patterns and coverage details in a secure, portable way. That means faster underwriting, smarter risk selection and better pricing for those who manage risk well.

For customers, protection becomes something that quietly works in the background—across countries, platforms and channels—instead of a one-time, paperwork-heavy transaction.

At the same time, insurers may rely on an entire army of AI agents to handle day-to-day tasks: answering queries, comparing products, monitoring exposures, flagging anomalies, and triggering workflows. These agents will effectively act on behalf of both the insurer and the customer.

That raises a new question for the industry: we won't just be insuring people and organizations — we will also need to think about how to insure the agents and the risks created by their decisions, errors, or failures.

As more processes are automated and more intelligence is built into systems, something important happens on the human side: we actually get more time and space to think.

More time to:

• Discover what risks and needs are emerging
• Innovate types of coverage and services
• Design better experiences for both physical and virtual worlds

AI, automation and advanced computing handle the volume and speed. Humans handle the nuance and direction.

Final Thoughts

The future will not argue with any of us.

We can continue to debate whether Al will really reach certain capabilities, whether regulators will permit specific models, or whether customers will fully trust automated decisions. Many of these discussions are valid and necessary.

But some trends do not wait for our full intellectual comfort. They advance quietly through small projects, pilot programs and incremental upgrades.

The future does not require large numbers of people to keep legacy processes alive. It requires fewer people doing higher-value work, supported by smarter tools and more connected systems.

Farmers have been managing the risks to productivity throughout human history, for example by selecting the most appropriate choice of crop to plant according to state of soil moisture at the time. This is efficient, dynamic risk management the old-fashioned way.

From the late 19th century, the traditional way of protecting against the risks of perils, including hail, drought, flood, frost, heatwave and windstorm, has been indemnity insurance.

But just as farming techniques have evolved, farmers today benefit from new sources of data and technology, combined with alternative risk transfer options, to better protect their interests. What's more, these alternative solutions can allow farming supply chain partners, from processors, manufacturers and retailers, to protect their particular interest in the primary inputs into global food and beverage industries.

What obstacles do farmers face with traditional insurance?

Traditional crop insurances rely on accurate measurements taken at field or farm level. However, visiting farms and fields, often in remote locations, can prove time-consuming and may not give farmers the payouts they need to recover from losses when they need them.

Also, if a loss event is widespread, affecting many growers at the same time, there may not be enough experienced individuals to carry out the necessary loss evaluation work fast enough.

That's when alternative insurance arrangements, such as parametric solutions, can benefit both farmers and their supply chain partners.

What benefits do parametric solutions offer farmers?

Parametric solutions differ from more traditional, indemnity-based insurance contracts. They don't rely on on-the-ground loss adjustment because there is no need to prove loss, as in indemnity insurance. Instead, the insurance contract provides a payment based on a threshold being met on a pre-agreed scale or index. Such an index may be quite simple, for example the millimeters of rainfall recorded during the growing season or a critical part of it. Indices can also be temperature based: how many hot (or cold) days at prescribed temperatures are recorded.

Parametric insurance also differs from traditional insurance because payments are made automatically when contract terms have been met, without any need to 'claim' in the conventional sense. While the index will have been calibrated to reflect conditions that are likely to have caused a crop loss, the actual condition of the crop and resulting harvest are not considered when the payment is calculated.

Parametric solutions can be applied in varying forms and to address distinct risks that affect the supply chain, including cropping (both annual and perennial) and also livestock, aquaculture and forestry.

How can satellite technology and parametric insurance protect farming supply chains?

The routine availability of remotely observed data from satellite sources removes the need for insurers to visit the location of the insured assets for either risk or loss assessment. Such data sources let insurers measure vegetation health and evidence of burning remotely.

Such data, when combined with parametric insurance arrangements, enables interested parties up and down the food chain to protect their interests. If your business relies, for example, on the successful harvest of coffee in Brazil but you're not the grower of that coffee crop, you can still protect your interest with an appropriately designed parametric contract.

Traditional contracts of insurance are typically regulated so the policyholder must have an 'insurable interest' and, in the event of a claim against the policy, to show a 'proof of loss.' Parametric contracts can operate outside traditional constraints. This flexibility enables partners across supply chains to achieve a broader range of risk management objectives.

How can farmers take the first step toward parametric insurance?

Parametric insurance may sound complicated and sophisticated, but, in practice, almost the reverse may be true. While it may take the careful input of highly skilled experts to construct such products and to ensure they are fit for purpose, for the end user they should be easy to understand with payments, when due, being swiftly settled.

If you're a farmer or would like to explore protecting an agricultural supply chain partner with parametric insurance, your first step would be to assess your supply chains and their vulnerabilities. Geospatial analytical tools, for example, can help you quantify the likelihood and severity of multiple perils across global supply chains.

Several insurance firms rely on legacy claims processing systems that create significant obstacles for maintaining ethical standards and transparency. These outdated systems feature siloed data structures that make it nearly impossible for claims adjusters to deliver fair and transparent outcomes.

Legacy infrastructure prevents effective data sharing between departments. Claims adjusters cannot identify fraud patterns when information remains trapped in separate systems. Manual workflows dominate these environments, with paper-based forms causing extensive delays in claim approvals. This leads to customer dissatisfaction and damaged relationships.

That's why insurance companies should consider modernizing their claims processing approach with solutions that prioritize both efficiency and transparency.

How Explainable AI Enables Responsible Claims Management

Explainable AI insurance claims processing software brings a fresh approach to insurance technology. It makes AI decisions clear and easy to understand. Traditional "black box" claims AI systems keep their decision-making hidden, but explainable AI shows the exact reasoning behind approving or rejecting claims.

This technology bridges the gap between complex algorithms and human understanding. Claims adjusters can check the AI's logic and change decisions when needed. This creates a vital balance between streamlined processes and ethical oversight.

Transparency gives this technology its edge. Traditional AI might simply mark a claim as fraudulent without explanation. Explainable AI reveals the specific factors that raised red flags. This helps adjusters make better decisions instead of blindly trusting machine outputs.

The technical gains offered by explainable AI claims processing software include:

• Consistent Decision-Making Across Large Volumes - Claims processing system insurance software applies uniform criteria to thousands of claims while maintaining human supervision capabilities. This consistency eliminates the variability that occurs when different adjusters handle similar cases using manual processes.
• Adaptive Fraud Detection - Unlike rigid rule-based systems, explainable AI insurance claims processing software adapts to new fraud patterns quickly. The technology learns from emerging schemes and adjusts detection mechanisms while providing clear explanations for why claims receive fraud alerts.
• Faster Processing Times - Automated analysis significantly reduces the time required to evaluate claims. Adjusters spend less time gathering information and more time making decisions based on comprehensive data analysis.
• Regulatory Compliance Documentation - These systems create detailed audit trails that demonstrate compliance with regulatory requirements. Every decision includes documentation showing the factors considered and the reasoning applied.
• Enhanced Customer Communication - Clear explanations help adjusters communicate decision factors to customers effectively. Even when claims are denied, customers receive specific reasons rather than generic responses.

Insurance companies can now provide the transparency that customers expect while maintaining operational efficiency.

Improving Processing Transparency and Ethics

Explainable AI has become the lifeline of modern insurance claims processing systems. 

1. Supporting Human-AI Collaboration

A technical survey found that 44% of insurance customers continue to trust the decision-making process of human claim adjusters over AI-based systems. Explainable AI systems create productive partnerships between claims adjusters and automated technology. Rather than replacing human expertise, these solutions highlight relevant policy details and flag potential inconsistencies. The system explains its recommendations using clear language that adjusters can easily understand.

By implementing explainable AI claims systems, adjusters can maintain greater control over the claims decision process. They can assess the intelligent model's reasoning, validate precision, and override automated decisions when claims processing requires human intervention. This collaborative approach produces decisions that balance efficiency with ethical considerations.

For example, when processing a property damage claim, the claims processing system insurance software might highlight specific policy clauses while flagging unusual repair cost estimates. The adjuster receives clear explanations for both observations, enabling informed decision-making rather than blind acceptance of automated outputs.

2. Promoting Ethical Fairness and Bias Reduction

Modern insurance claims management systems do more than process data. They identify and reduce potential bias. These systems make decision-making criteria visible, which allows insurers to check if certain customer groups experience different outcomes. This visibility helps create fairer assessment protocols and gives equitable treatment to all policyholder demographics.

3. Improving Customer Trust Through Transparent Communication

Clear explanations about claim status significantly improve customer satisfaction levels. Explainable AI insurance claims processing software enables adjusters to provide specific reasons for decisions rather than generic form letters. Customers understand the precise factors that influence their claim outcomes.

Even denied claims receive better customer acceptance when explanations are thorough and understandable. Adjusters can point to specific policy language, documentation requirements, or coverage limitations that apply to each situation. This transparency develops trust even during complex conversations.

Insurance agents benefit from extensive claims decision logs that enable them to respond to policyholder queries with greater precision. The result is improved customer experience throughout the entire claims process.

4. Facilitating Continuous Auditing and Model Accountability

Transparent claims management systems for insurance create detailed audit trails that document every decision-making step. Supervisors can review patterns across thousands of claims to spot potential problems before they become systemic. This continuing accountability keeps the system reliable and trustworthy.

5. Strengthening Compliance

Insurance regulations require justifiable decisions and transparent processes. Explainable AI claim processing systems provide documentation that proves compliance with evolving regulatory requirements. This helps insurers avoid penalties while building stronger governance frameworks.

Legacy Claims Processing Challenges

Traditional claim processing systems create several critical challenges that reduce efficiency and ethical operations in the insurance industry. Explainable AI provides targeted solutions to these continuing problems and helps insurers overcome major obstacles.

I. High Error Rates and Inconsistent Claim Outcomes

Legacy claims management systems with manual data entry cause frequent errors and inconsistent decisions. Claims adjusters often make decisions with incomplete information that result in different outcomes for similar cases. Explainable AI claims management systems for insurance solve this through standardized processing protocols, while human oversight remains where needed. This combined approach gives consistent judgments and keeps the flexibility to handle unique claim situations.

II. Ineffective Fraud Detection Mechanisms

Traditional claims processing system insurance solutions use rigid rules that clever fraudsters can easily bypass. These systems are incapable of managing subtle patterns and new fraud techniques. Whereas explainable AI claims software identifies complex connections across data points and highlights potential fraud activities that human reviewers might overlook. They also give clear explanations about flagged claims.

III. Lack of Predictive Insights and Adaptive Intelligence

Older insurance claims management systems react to situations instead of preventing them. They don't know how to predict claim patterns or adapt to changing risk landscapes. Explainable AI platforms learn continuously from new data and improve their accuracy over time. They remain transparent about how they generate predictions.

IV. Poor Customer Experience and Communication Gaps

Legacy systems keep claimants uninformed about their claim status. Policyholders often complain about limited visibility into decision processes. Explainable AI platforms enable clear communication about claim progress and decision factors. This deepens customer trust even when outcomes are negative.

Final Words

Insurance companies are moving away from legacy claims processing systems to explainable AI, and this marks a major change in claims handling. Old opaque processes left customers confused, and adjusters didn't deal well with limited information. But explainable AI fixes this gap naturally.

Trust forms the foundation of claims processing. Policyholders need fair treatment when they file claims during vulnerable moments. Explainable AI keeps this trust intact while making the process more efficient. These systems don't replace human judgment; they boost it by giving adjusters clear reasoning behind every recommendation.

What brokers actually do, beneath the pitch decks and client presentations, is harder to name than it should be. I've come to see it as three distinct but deeply connected acts: representation, translation, and defense. None of them are transactional. All are structural. And when one breaks down, the entire architecture starts drifting in ways that don't announce themselves until pressure arrives.

Representation

We tell ourselves we represent the client. It's written into the mandate, formalized in the engagement terms. But that's not what I mean when I talk about representation as a function. Real representation is interpretive work. It's absorbing not just what the client articulates in meetings but what they can't fully express or haven't realized matters. The CFO's underlying anxiety about retention levels that never gets voiced directly. The operational reality that contradicts what's written in the business continuity plan. The political tension between local offices and headquarters that shapes every decision but never appears in formal communications.

A good broker doesn't just collect this information and file it away. They inhabit the client's frame of reference well enough to anticipate friction before it surfaces, to shape options in language that resonates with how the organization actually makes decisions under pressure, not how they describe their decision-making in the abstract.

This work resists automation because it operates in the space of what isn't said. The risk manager who mentions supply chain concerns but doesn't mention the board's private anxiety about a key supplier in political turmoil. The CFO who approves the renewal but whose body language signals doubt about whether local subsidiaries will comply. You can't checkbox your way into understanding what keeps someone's leadership team awake at 3 a.m., or what past incidents have shaped their risk appetite in ways they haven't articulated.

When representation fails, it fails quietly at first. The client says yes to a structure they don't fully understand, or worse, that doesn't quite match what they thought they were agreeing to. Six months later, at claim time, that gap becomes visible and consequential. By then it's too late to recover the alignment that should have been built from the beginning.

Translation

Here's where the function becomes more complex and less visible from the outside. Clients don't speak insurance. Markets don't speak business operations. The broker stands between these two worlds, translating in both directions, and this is genuine translation in the transformative sense, not simple transmission.

A client says something like "we're worried about supply chain disruption" and that statement, while meaningful to them, isn't something a market can price or structure coverage around. The broker needs to transform that anxiety into something that can be underwritten: specific exposure scenarios, concentration risk analysis, dependency mapping, contractual arrangements with suppliers, mitigation measures already in place.

Then the market comes back with their response, which might be, "We'll write it, but we need a 72-hour notification clause and a sub-limit on critical suppliers." Now the broker has to translate that back into consequences the client can evaluate in operational terms. What does 72 hours mean in the context of their actual supply chain? If the client's procurement operates on quarterly cycles and their logistics team is in a different time zone with no weekend coverage, that 72-hour clause isn't a technical requirement. It's a structural impossibility that will surface as a coverage gap during a claim. What constitutes a critical supplier in the policy language versus in their business model? What happens when those definitions don't align?

This is knowledge work that creates value precisely by bridging incommensurable ways of understanding the same underlying reality. The broker needs to be fluent in multiple languages simultaneously: the operational language of the client's business, the technical language of insurance contracts, the commercial language of market negotiation, and the legal language of claims defense. More critically, they need to know how to move among these languages without losing essential meaning in the translation.

Platform automation can make failures in this translation work particularly invisible. Information passes smoothly between systems without requiring interpretation, and misalignments get embedded from the start, invisible in the flow of data that appears to be working correctly.

Defense

The first two functions matter enormously, but defense is where they actually get proven. When a claim is contested, when coverage becomes ambiguous under specific circumstances, when a market pushes back hard on their obligations, this is the crucible that tests whether the entire structure holds.

No platform can argue a claim under contested wordings. No template can untangle jurisdictional complexity when a multinational client has an incident that touches three countries with different policy triggers and legal frameworks. No automation can stand between a client and a reluctant market when things get genuinely difficult and relationships are strained.

Major claims regularly hang in suspension because the broker who placed the program has moved on, and no one remaining can explain why certain structural choices were made. The documentation exists, perfectly filed. But the reasoning behind a split trigger structure across jurisdictions, or why specific sub-limits were set at particular thresholds, has left with the person who built it. The market sees ambiguity where there should be clarity, and coverage that seemed solid becomes contested.

Defense is existential work. It's the moment when the broker's function becomes most visible, when all the careful work of representation and translation either compounds into coherence or reveals itself as insufficient.

Defense reveals the quality of representation and translation that preceded it. Good representation creates a foundation of mutual understanding that makes defense easier when pressure arrives. Good translation produces clear documentation that withstands scrutiny and doesn't create new ambiguities under stress. When defense succeeds, it typically does so because representation and translation were performed well from the beginning. When defense fails, you can almost always trace the failure back to a gap in representation or a distortion in translation that went unnoticed during the calm periods. The claim becomes the moment when hidden misalignments become visible and consequential.

Why They Work as a System

These three functions don't operate in sequence. They work as a feedback loop. Every claim you defend teaches you what actually matters in representation. Every translation that fails under scrutiny reveals gaps in your initial understanding of the client's operations. The system learns, but only if the same intelligence holds all three functions.

This is why traditional cross-functional team structures don't work well for broking, despite their popularity in other contexts. Cross-functionality distributes partial competencies across specialists who each own a piece of the process. But effective broking requires holding all three functions simultaneously in integrated view. You need to see how choices made during representation will affect translation work later, and how both create the conditions for eventual defense. When these functions get distributed across different people or teams who can't see the full arc, the feedback loop breaks and the system loses its ability to learn and adapt.

Nobody else in the insurance ecosystem is structurally positioned to hold all three at once. That's what makes the broker's role irreducible to its component parts.

What Happens When It Breaks Down

What concerns me is that as platforms become more sophisticated and persuasive in their interfaces, these three functions risk getting simulated rather than genuinely performed. Representation becomes templated intake forms that capture standard data points. Translation becomes automated data mirroring that passes information between systems without transformation. Defense becomes an escalation protocol that routes problems through predetermined channels.

The organizational structure looks the same on paper. The dashboards show activity and completion metrics. But the system stops thinking in any meaningful sense. It stops adapting to what it learns. It loses the capacity for judgment that accumulates through experience.

This pattern appears when operational metrics look excellent while the capacity for genuine broking work degrades. A sophisticated platform migration maps every data field perfectly, preserves every document template, automates every workflow. Six months later, the team can't explain why a D&O program has separate retentions in different jurisdictions, or why certain sub-limits were structured the way they were. The logic lived in institutional memory. The platform captured the output but not the reasoning. When the people who built the structure move on, the program becomes an artifact no one can interpret.

This pattern appears when operational metrics look excellent while the capacity for genuine broking work degrades. Coverage structures get ported through system migrations, and at each step the program logic gets simplified to fit new data architectures. When claims arrive that test the structure, teams can't explain why certain elements exist or what scenarios they were meant to handle. Fluency in the platform's language replaces fluency in the client's business. The interpretive memory of why structures were built gets lost. The simulation of broking replaces its substance, and the difference only becomes visible when genuine pressure arrives.

What This Means Going Forward

I'm not arguing against platforms or digital transformation. The efficiency gains matter, and clients have come to expect sophisticated digital interfaces as table stakes. But we need much greater clarity about what technology can and cannot do.

Technology can accelerate transactions and make process visible. It cannot interpret complexity or maintain judgment across time. It can structure workflows and standardize inputs. It cannot hold the kind of accumulated understanding that gets better with experience rather than worse with scale. It can simulate the appearance of alignment. It cannot defend that alignment when it comes under genuine stress.

The brokers who will remain relevant aren't the ones who adopt new technology most quickly or enthusiastically. They're the ones who understand precisely which parts of their function can be automated without loss and which parts require human judgment that deepens rather than degrades over time. They're the ones who can articulate the difference between performing these three functions and merely simulating their performance through sophisticated interfaces.

Representation, translation, defense. Three functions that work as an integrated system. Easy enough to describe in the abstract. Much harder to automate without losing what makes them valuable. Essential to preserve if broking is going to remain a strategic function rather than devolving into process management.

The question for every broker is whether they're actually performing all three or whether they've gradually allowed platforms to simulate them while the substance quietly erodes. Your clients won't know the difference until the moment they need you most. By then the damage isn't just a failed claim. It's a program structure no one can defend because no one remembers why it was built that way. The broker who can't explain why becomes the broker who can't argue when. And that's when representation, translation, and defense collapse from professional functions into administrative tasks no platform can rescue.

The insurance industry has spent years talking about modernization. Strategies drafted, budgets allocated, and pilot programs launched. But after early progress, momentum is slowing—and for many carriers, stalling altogether. The result is an industry caught between ambition and execution, where the cost of standing still grows with each passing quarter.

Recent data from West Monroe's survey of 300 insurance executives reveals a distinct pattern: while nearly every carrier has modernization plans in motion, few are making meaningful progress. 20% have defined strategies but haven't advanced execution. Another 12% remain in early planning stages. The most jarring: two-thirds of insurers expect it will take another three to seven years just to move core systems to the cloud, with 14% having no timeline at all.

This goes beyond technology. It's a business risk that's compounding with each passing quarter.

The Legacy Tax Is Draining Innovation Capacity

The clearest evidence of stalled momentum shows up in budget allocation. More than half of insurers now spend 51-75% of their IT budgets simply keeping existing systems operational. This "legacy tax" creates a self-reinforcing cycle: aging systems require more maintenance, leaving less capital for transformation, which in turn allows those systems to age further.

The impact is measurable. In the past 12 months alone, 52% of organizations delayed or canceled two to three strategic technology programs due to budget constraints. These programs include data governance improvements, AI capabilities, and customer experience enhancements that would position carriers for future competition.

Many insurers are still running core operations on COBOL, a language older than most of their customers. More than half report between six and 15 mission-critical COBOL modules still in production, revealing how deeply legacy code runs through their systems. This dependency exposes a major contradiction: organizations may have modern customer-facing experiences, yet their back-end processes remain anchored to aging infrastructure that limits scalability, agility, and speed.

Closing that gap requires more than new tools—it takes a clear modernization strategy that balances innovation with operational stability.

Speed Matters, And It's Slipping

The operational consequences of stalled modernization are impossible to ignore. 41% of executives say their critical data is only available when needed, not in real time. That lag translates directly into competitive disadvantage.

Consider the pace of basic operations: 48% report it takes 16 to 30 days to complete a rate indication assessment. Nearly half say it takes nine to 16 weeks to launch even a minor product endorsement. In a market where competitors can respond to emerging risks in days, not months, this kind of delay erodes competitive positioning.

In a market defined by speed, the ability to act in real time is becoming a key differentiator—separating those who capture growth from those still optimizing for stability.

The AI Paradox: Investing in Tools Without Foundations

Perhaps nowhere is the momentum problem more evident than in artificial intelligence adoption. Nearly 60% of insurers report being past the pilot stage with generative AI, yet most deployments remain small-scale and fragmented. Claims leads slightly with 30% actively piloting tools, while underwriting shows 27% still in proof-of-concept.

The stall is structural, not technical. Organizations that haven't invested in platform and data modernization face mounting costs and complexity. Large-scale transformations of policy administration, billing, and claims systems are creating more tech debt, pushing carriers further behind.

When asked about barriers to AI adoption, respondents pointed overwhelmingly to human factors: 24% cited resistance to change, 23% struggled with unclear value propositions, and 20% pointed to poor user experience. Only 13% identified technical issues as the primary obstacle.

This reveals the core challenge: insurers are trying to scale AI on foundations that weren't built for it. Without modern data governance, unified platforms, and streamlined processes, even sophisticated AI tools remain trapped in pilots instead of powering real underwriting and claims improvements.

Business and IT Misalignment Multiplies the Problem

Momentum stalls when priorities diverge. While 40% of organizations report "some alignment" between business and IT, that qualification signals trouble. Critical disconnects remain, and those gaps slow decision-making, blur accountability, and fragment modernization efforts across competing initiatives.

The data shows this misalignment in action. When asked about primary modernization objectives, 36% said improving customer experience, yet when budget allocation was examined, customer digital experience ranked last in funding priority. Meanwhile, 30% are betting on GenAI and advanced analytics, but 28% acknowledge their data layer and governance must mature first.

This represents an execution gap. Without shared ownership between business and IT, modernization risks solving for technology instead of solving for customers. The organizations breaking through are those that have hard-wired collaboration into their operating model, ensuring priorities and budgets move in lockstep.

Breaking the Stall Requires Strategic Focus

Momentum doesn't return through incremental adjustments. It requires strategic recalibration. Carriers gaining ground have stopped treating modernization as a technology initiative and started treating it as a business imperative tied to measurable outcomes.

That means rebalancing spend away from maintenance toward platforms that reduce future technical debt. It means building data governance that enables speed, not just compliance. And it means aligning business and IT not just in planning sessions, but in budget cycles, decision rights, and accountability structures.

Most critically, it requires accepting that modernization timelines measured in half-decades are no longer viable. When asked what would happen if modernization efforts froze for 24 months, 45% predicted significant competitive disadvantage. Yet nearly one in five believed a freeze would have minimal effect, a perception gap that signals how far some organizations still are from connecting technology strategy to business outcomes.

Those Who Move First Will Define What's Next

Momentum can't be restarted by chance—it has to be rebuilt with intent. The carriers regaining speed are the ones tackling legacy debt, modernizing data foundations, and aligning business and IT around a shared vision. With these foundations in place, AI and emerging technologies can do more than pilot—they can accelerate real performance and growth. For insurers, restoring momentum isn't just about catching up; it's about setting the pace for what comes next.

As we enter 2026, the insurance industry faces one of the most significant technology shifts in decades. After years of patchwork upgrades, costly integrations, and cautious experimentation with artificial intelligence (AI), the pressure to modernize has become urgent. Economic, regulatory, and technological forces are converging to make modernization a business imperative. Several forces will define insurance technology in 2026:

• Modernization will continue to drive profitability through tax incentives, operational efficiency, and cloud adoption.
• Regulators will further enable responsible innovation while maintaining accountability.
• AI adoption will reward readiness — carriers with modern infrastructure and unified, real-time data will gain further speed, insight, and competitive advantage.
• U.S. software will regain global leadership as domestic platforms expand adoption in Europe and the U.K.

Carriers that act decisively know they will reduce costs, accelerate innovation, and improve competitiveness — and they're already moving ahead with modernization projects. Those that delay will struggle with systems that cannot support growth or meet rising customer expectations. The next 12 months will be critical. The gap between modernized and legacy-bound carriers will widen as AI, regulation, and economics all reward readiness.

The Cost of Legacy

For decades, insurers have been burdened by legacy systems built for a different era before application programming interfaces (APIs), cloud infrastructure, and real-time analytics became standards. These systems are fragmented, expensive to maintain, and slow to adapt. Every innovation, from digital onboarding to predictive analytics, has been required to work around outdated technology rather than work with it. Maintaining these systems consumes resources that could fund other growth initiatives, accelerate claims processing, and improve the overall customer experience. Operational inefficiency has become a serious liability.

Economic and Regulatory Drivers

Recent U.S. tax legislation, known as OB3, makes modernization more financially attractive. It allows accelerated or immediate write-offs for software, digital infrastructure, and R&D investments, reducing near-term taxable income and freeing capital for technology reinvestment — an advantage for insurers competing in a capital-intensive market. This makes upgrading legacy systems and adopting modern, cloud-native platforms a strategic and financially sound choice.

Regulators are now more apt to remove obstacles for innovation and modernization. They are shifting from purely enforcing compliance to actively enabling insurers to adopt new technologies responsibly. This change in oversight encourages innovation that improves transparency, accuracy, and consumer outcomes. This environment allows carriers to deploy automation, predictive tools, and digital distribution with fewer delays while remaining compliant. These updated oversight practices and flexible frameworks align strategic and regulatory incentives for modernization.

AI Opportunity and Caution

AI promises to accelerate decision-making, improve risk pricing, and enhance the customer experience, but insurers cannot realize these benefits without the right infrastructure. AI is already transforming risk assessment, underwriting, claims triage, fraud detection, and customer engagement. Generative AI assists with policy drafting, marketing, and document automation. However, many carriers are unprepared to deploy these tools effectively. Legacy systems, siloed data, and fragmented architectures limit integration and data accessibility and the ability to scale AI effectively.

Many AI systems rely on shared or external models that continuously learn from the data they receive. Without careful governance, insurers could inadvertently share proprietary information with platforms that also serve competitors. Cloud-native architectures, unified data strategies, open APIs, and robust data governance are prerequisites for effective AI deployment.

Forward-looking carriers treat AI as a multiplier of modernization rather than a cure-all. Unified platforms enable real-time data across underwriting, claims, and customer service. On this foundation, AI accelerates decision-making, improves risk pricing, and enhances customer experience.

2026 Marks The Year Modernization Becomes A Business Imperative

Modern, seamless technology is available and proven. Fiscal incentives are clear. Regulatory flexibility is aligned. 2026 is the year modernization will define who will flourish and who will flounder. Carriers with iconic leaders will make decisions that will catapult them ahead of complacent competitors who will be reduced to the scrap heap of black and white televisions and legacy software providers.

Carriers that modernize core systems, unify data, and make informed AI decisions will build the foundation for long-term competitiveness, achieving operational efficiency, sharper insights, better risk pricing, and faster time to market. AI will amplify the benefits for those who are prepared and expose inefficiencies for those who are not.

The pursuit of excellence is a curse that only innovation can cure. There is no cure for the complacent and the abyss awaits.

As someone who has spent the last two decades in insurance, I've witnessed the perennial struggle faced by carriers and agencies alike: you have enormous volumes of data, legacy systems built on silos, and you're making many of your strategic decisions based on reports that are weeks, sometimes even months, old. The issue isn't access to data. It's the inability to analyze and operationalize that data in real time.

In the world of insurance, the ability to access and act on insights as events unfold is fast becoming the new "power center" of leadership. Why? Three key reasons: agility, precision, and control.

Agility

The pace of change in this industry is accelerating, especially since Covid-19 forced companies to take a hard look at their digital strategy. Shifting consumer expectations, compressed margins, evolving incentive structures, and new distribution models require leaders to respond quickly. Yet most still rely on batch reports pulled manually from core systems.

According to one recent insight, many insurers remain hamstrung by systems that cannot deliver analysis in real time, forcing backward-looking decisions. Real-time analytics can eliminate that delay. Instead of waiting for month-end or quarter-end reporting cycles, leaders can monitor performance as it happens, whether it's agent productivity, product mix shifts, lead conversion trends, or persistency drops.

Precision 

In today's world, precision is required to understand patterns like:

• Which products are driving the highest lifetime value?
• Which agents are trending toward lower persistence?
• Where are revenue leaks occurring?
• Where is there early evidence of chargebacks or clawbacks that will erode revenue?

These are some core questions that leaders grapple with daily, and they can't be answered with static spreadsheets. When analytics are available to them in real time, leaders can spot early signals before they turn into financial problems.

Control

For decades, core systems for commissions, reporting, policy administration, and field performance have been disconnected. The result: fractured visibility and slow response times. With real-time analytics unifying these workflows, leaders can intervene earlier, forecast more accurately and coach more effectively. Imagine giving agents visibility into their own earnings trajectory and book of business health or regional leaders having live dashboards highlighting where risks are emerging or products are outperforming.

The implication for leadership is profound. If you don't make real-time analytics a core capability, you're ceding strategic advantage.

Picture a distribution network where you don't wait for quarterly performance reviews or manual data pulls. Instead, you see live indicators of channel performance, emerging lapse risks, commission anomalies, and revenue movement. You can intervene the moment an issue surfaces, not weeks later.

This is the shift: from reacting to yesterday's insights to orchestrating today's outcomes.

Real-time analytics are no longer a "nice to have." For insurance distribution leaders, they define who will operate reactively and who will lead.

Cyber risk has always been dynamic, but the pace of change in the last few years is clearly accelerating. While past underwriting and claims management strategies depended on broad patterns — such as the frequency of breaches or size of average losses — the road ahead is going to demand both precision and flexibility.

A few recent trends highlight exactly what insurers and risk professionals should be aware of to prepare for what comes next.

Greater precision can lessen exposure

One of the most disruptive shifts in the cyber insurance market has been the explosion of class action lawsuits. While regulatory penalties and business interruption losses once dominated the conversation, the threat of litigation is now a defining feature post-breach.

Thankfully, new forensic tools are shifting the equation and bringing more nuance into cyber incident analysis. Parsing out what personal information was truly compromised in a particular breach — versus data already circulating on the dark web — could help limit a breached company's potential liability when previously exposed data is misused. The precision can also help guide the company's mitigation strategy accurately.

Given the changes in how breaches are litigated, cyber policies and coverage models will need to continually evolve. When weighing cyber resilience, underwriters may increasingly consider an insured's legal readiness, in addition to the technical security controls in place.

Meanwhile, claims teams should prepare for more aggressive breach responses using data-driven tools to help limit legal exposures.

Examining the cost of complexity

The advancing sophistication of third-party breaches is another trend. While the number of third-party breaches has receded from the historic highs of the past couple of years, the effect of each incident is amplified given how modern businesses rely on vendors. Successfully breaching a single vendor can give attackers access to the data of dozens — and sometimes hundreds — of downstream organizations.

Given the number of organizations involved in a single incident, unwinding third-party breaches can be incredibly complicated. Compromises of managed service providers, cloud platforms and specialized software vendors have demonstrated how a breach cascades throughout an entire supply chain.

When losses aren't confined to a single policyholder, third-party breaches can trigger disputes among multiple insured organizations, partners and carriers. As companies debate who bears responsibility for damages, the complexity of the breach often prolongs claims resolution and adds strain to relationships.

Moving forward, risk professionals will need to consider detailed assessments of supply chain exposure in their underwriting. When reviewing incident response plans, policyholders and their insurers should consider how a breach at a critical service provider might ripple across the industry, affecting operations. Cyber risk assessments might also take a page from catastrophe modeling in property insurance, focusing not only on the likelihood of an event but also examining the interdependencies that might make it even more damaging.

Uncovering emerging cyber markets

While the future holds new challenges, there are also new opportunities for insurers willing to get creative. Extending cyber insurance into markets where coverage has rarely been seen is one such innovative approach.

Connected cars is one area experiencing rapid growth. Two out of every three cars sold today feature embedded connectivity, and industry observers project it will reach nearly 100% of cars sold by 2030 — just four years from now. If a vehicle's operating system were to be compromised, it could not only expose the owner's personal information and vehicle details, it could also affect public safety.

Some forward-looking carriers are beginning to experiment with cyber add-ons tied to personal auto coverage. The model is similar to usage-based telematics insurance programs — which have gained traction over the past decade. Just as some drivers were willing to exchange driving data for premium discounts, security-minded policyholders may be open to sharing insights into their digital behaviors in exchange for proactive protection.

These new personal cyber offerings can help diversify portfolios and address a rapidly expanding risk landscape. Yet, insurers should be ready for questions about privacy and liability as more personal data becomes part of the underwriting and claims process. Lessons learned from past telematics programs about transparency, opt-in design and clear policyholder education will prove critical in this next phase.

Insurers that can balance innovative coverage with sound risk management will find themselves in the driver's seat for these new growth engines.

Balancing risk and growth in 2026

As insurers plan for 2026, they should look to conduct risk assessments with a sharper eye for both systemic exposures and new avenues for growth. Success will be found by those that combine legal strategy with technical precision, map the intricacies of supply chain risk and capitalize on new opportunities with products for security-focused consumers.

The future of cyber coverage may be defined as much by creativity as by technology. Insurers who recognize this dynamic and embrace it will be best positioned to navigate the year ahead.

This article is adapted from the TransUnion e-book 2026 Cyber Protection Challenges and Opportunities.

For many seniors, the constant ringing of the phone has become a part of daily life. Unknown numbers. Out-of-state callers. A cheerful voice promising "burial insurance you can't afford to miss." What most people don't realize is that behind many of these calls sits a high-pressure operation designed to close a sale before a senior ever has the chance to truly understand what they're agreeing to. This is the world of telephonic final expense insurance sales, and over the last decade, it has quietly become one of the most predatory industries targeting older Americans.

Final expense insurance itself isn't the problem. When sold ethically, it's a simple, helpful product meant to ease the burden on families during one of the hardest moments of their lives. But as the industry shifted from local agents meeting families in their homes to large call centers dialing thousands of numbers every day, something important was lost: humanity. What replaced it was a business model built on speed, pressure, and emotional manipulation.

The modern final expense call center looks less like a professional insurance agency and more like a boiler room. Rows of agents sit with headsets, instructed to make as many calls as possible and keep the senior on the line at all costs. The expectation is not to educate, but to convert. Bonuses are tied to fast sales, not good advice. The sooner the agent gets payment information, the better. It's a numbers game, and the senior on the other end of the line is the number.

These operations target the most vulnerable: seniors living alone, those with low incomes, individuals who have recently searched online for burial insurance, and especially those who feel anxious about their health or finances. Once a senior's information enters one of these systems, the calls rarely stop. Some seniors report receiving a dozen calls in a single afternoon. To the call center, persistence is considered "follow-up." To the senior, it often feels like harassment.

The sales tactics used in these calls rely heavily on fear. Agents are trained to emphasize burdens, guilt, and urgency. Phrases like "You don't want your children stuck with your bills, do you?" or "If something happens tomorrow, your family will be unprotected" are common. Seniors who are already worried about their families are pushed further into anxiety. They're led to believe that if they don't act right then—on that very call—they may lose eligibility forever.

Another widespread issue is the way health questions are handled. In order to qualify a senior for a lower premium, some agents simply rush through medical questions, paraphrase them, or answer on behalf of the applicant. A senior may think they're being honest, while the agent quietly checks every box as "no." The client believes they're approved for immediate coverage, but the truth often catches up later—when a claim is denied because the application was completed inaccurately. By then, the agent is long gone, the call center has moved on to new leads, and the family is left with heartbreak.

Even when the policy itself is legitimate, the pricing can be misleading. Many seniors are quoted a very low monthly premium at the beginning of the call, only to learn later—if they notice—that the actual cost is higher. Sometimes the policy issued isn't even the plan discussed. In extreme cases, seniors are tricked into buying accidental death policies, which do not cover natural causes of death at all. The family may not discover this until it's too late.

Another problem with the telephonic model is the "one-call close." Seniors are asked to provide sensitive personal information—full name, date of birth, Social Security number, bank routing number—on the very first call. They are encouraged to enroll before having any time to think, read, or consult a loved one. Legitimate insurance professionals never behave this way. A rushed enrollment helps the call center, not the senior.

What happens after the sale is often just as concerning. Many call center agents move on quickly, never staying long enough to build a client relationship. Seniors who try to reach their original agent often find disconnected numbers or voicemail boxes that are never checked. When beneficiaries need help filing a claim, they are forced to navigate a maze of customer service menus. There is no continuing review, no annual checkup, no personal guidance—just an impersonally issued policy that may or may not fit their needs.

This is not how insurance is supposed to work. At its best, it is a relationship business. It requires trust, honesty, and time. A good agent asks questions, listens carefully, reviews multiple companies, and explains every detail before asking a senior to make a decision. A good agent makes sure the family knows what they're buying and why it matters. A good agent shows up when it's time to file a claim.

So how can seniors protect themselves in an environment where their phones are ringing nonstop with aggressive offers? The first rule is simple: never give financial information on the first call. The second is to ask the agent for their license number and verify it through the state's insurance department. The third is to request written information before enrolling. Ethical agents will always provide it. Seniors should also be wary of high-pressure phrases, sudden deadlines, and promises that feel too good to be true. And finally, if possible, seniors should work with someone local or someone who can be reached directly—not an anonymous voice from a rotating call center queue.

Final expense insurance will always have a place in this world. Families deserve the peace of mind that comes with knowing arrangements are covered. But as long as high-pressure call centers continue to prioritize speed over service, seniors must remain vigilant. Awareness is protection. The more sunlight we shine on these practices, the harder it becomes for predatory operations to hide behind friendly voices and fast talk. Seniors deserve better—at the very least, they deserve the truth.

Now more than ever, it's crucial to eliminate waste, inefficiency, and unnecessary spending in healthcare wherever they occur.

One way to achieve this is by resolving misalignment among health plans, providers, patients, and government health programs on various issues. Although these four stakeholders share the goal of affordable, accessible, high-quality healthcare, their ideas about what that entails, how to achieve it, and who should bear the costs differ significantly. Aligning them remains a continuing and very challenging task, but it is essential if healthcare in this country is to endure the pressures it faces.

The problem of misalignment

Clinical lab testing exemplifies this competitive misalignment. It affects all four stakeholders, and although lab testing accounts for only a small portion of total healthcare spending, it remains crucial to clinical decision-making, care coordination, and cost management.

Consider stakeholders' varying expectations of lab testing:

1. Patients want their tests to be medically necessary, accurate and paid for by insurance.
2. Providers want to order tests they consider necessary without interference from plans and to be reimbursed for them.
3. Plans require tests to be clinically appropriate and accurate while managing costs.
4. The government aims to control costs, prevent waste, fraud, and abuse, and often gets involved in private sector healthcare regarding issues like mandated testing, reimbursement, prior authorization, and more.

Not all worthy goals are mutually exclusive, but aligning all stakeholders on how to achieve them is challenging. It requires an approach that balances everyone's interests while maintaining fiscal responsibility and quality control. It also demands lab stewardship.

The need for lab stewardship

Lab stewardship is a practice that promotes the correct use of tests, aligns clinical and financial outcomes, and ensures compliance with evolving payer policies. It has five goals:

1. Access to testing
2. Correct test ordering
3. Accurate and timely test result retrieval
4. Correct result interpretation
5. Financial alignment between patients, laboratories, and payers

Implemented correctly, it can do much to improve lab testing by:

• Ensuring proper test use and reimbursement
• Reducing unnecessary tests and costs
• Improving patient safety and diagnostic accuracy
• Integrating into governance, analytics, and clinician education

A health plan or lab benefits manager working for the plan enforces stewardship through a comprehensive solution:

laboratory benefits management (LBM) involves using evidence-based laboratory policies and pre-authorization tools to reduce unnecessary tests and ensure that the right patients receive the right tests at the right time.

In addition, leveraging diagnostic intelligence capabilities that transform complex diagnostic data to provide predictive health insights, identify risks early, and guide interventions. This includes analyzing test volumes and patterns and preventing fraud, waste, and abuse.

Lab stewardship is not only a good policy; it's also required by law. In 2023, the HHS Office of Inspector General (OIG) issued a statement reminding the industry that lab stewardship is a regulatory requirement, and failure to comply can result in civil and criminal penalties.

What lab stewardship looks like

An effective lab stewardship program includes these critical components:

1. Enforcement driven by science. Lab stewardship is effective only when its programs are firmly grounded in scientific principles. That foundation guides optimal outcomes and is defensible to all parties. Policies based on science improve compliance by ensuring appropriate test ordering, enhancing quality, and reducing costs.
2. Preventive care integration. Policies should follow evidence-based practices and national guidelines, such as those from OIG, Choosing Wisely, and the American Society for Clinical Pathology, to ensure that testing is clinically appropriate.
3. Full transparency. Policies should be reviewed and regularly updated by an independent clinical advisory board. Meanwhile, health plans should retain complete control over the adoption and modification of policies, including any variances. This includes detailed information on specific billing procedures (procedure codes, edit types, fixed criteria) and a clear narrative of explicit conditions that align with policy compliance.
4. Provider education. Lab stewardship should include supporting clinicians and lab providers through real-time decision support, education, policy transparency, and justifiable evidence-based edits. The plan's policies determine denials.

Increased savings and better outcomes

A robust lab stewardship program using an LBM can lower outpatient lab costs by 10% to 18% and reduce unnecessary lab expenses by $1.75 to $2.35 per member each month.

Additionally, leveraging diagnostic insights can significantly contribute to population health and value-based care efforts by helping to identify members with certain conditions that might otherwise go undiagnosed, enabling earlier interventions.

Furthermore, the rising demand for genetic testing and personalized medicine is increasing the volume and diversity of laboratory tests, emphasizing the need for coordination among all stakeholders to ensure testing is performed effectively and produces the best possible results for everyone involved.

By aligning the goals and interests of all stakeholders within an evidence-based program, lab stewardship can advance the shared aim of affordable, accessible, high-quality healthcare.