APAC insurers, managing nearly $3.8 trillion in assets, are facing significant barriers due to legacy systems. While they believe they lead in digital transformation, outdated technology continues to hold them back from reaching their full potential. A recent survey by Clearwater Analytics found that 93% of APAC insurers cite legacy systems as a major constraint on growth.
Larger firms, especially those with assets over $50 billion, face even greater challenges as these outdated systems create a gap between their digital aspirations and their current infrastructure.
How Legacy Systems Impact APAC Insurers
Despite their digital ambitions, many APAC insurers are held back by legacy systems. Though 87% of insurers believe they are ahead of their competitors in digital transformation, their reliance on outdated technology stunts progress. Among the largest firms, 97% report that legacy systems impede their ability to innovate and grow.
Legacy technology continues to prevent insurers from fully embracing digital tools that can improve efficiency and boost growth.
Short-Term Focus and Staffing Issues
Another challenge identified in the survey is the sector’s short-term focus. 73% of insurers prioritize immediate issues over long-term digital transformation needs. This is particularly true among larger insurers, where the figure rises to 90%.
Staffing challenges related to legacy systems are also a concern. Over half of insurers reported difficulty finding employees skilled in managing outdated technology, and 15% described this as a serious problem. As the demand for digital skills increases, insurers expect these staffing issues to worsen over the next five years.
Employee Resistance to Change
Resistance to change within the workforce is another major barrier to digital transformation. The survey found that 95% of insurers experience employee resistance to adopting new systems and operating models. This reluctance to embrace change slows the pace of innovation and prevents insurers from fully advancing in their digital transformation journey.
Diversity and Flexibility in the Workforce
The survey also pointed to concerns regarding workforce diversity. About 59% of respondents believe that a lack of diversity in thinking and background is hindering the insurance industry’s progress. This gap in perspectives may slow down the adoption of new technologies and innovative solutions.
Despite these challenges, 89% of executives are confident that their business models are flexible enough to adapt to future demands. Additionally, 96% of respondents expect an increase in mergers and acquisitions, indicating that the industry is continuing to evolve.
Conclusion: Overcoming Legacy Systems in APAC Insurers
The findings from Clearwater Analytics highlight a critical gap between insurers’ digital goals and the reality of managing legacy systems. Although APAC insurers are making strides toward digital transformation, outdated technology continues to limit their potential. To fully embrace the benefits of digital transformation, insurers must modernize their systems, address staffing issues, and foster a culture that embraces innovation.
