A new study by Covernet has identified a significant gap between the ambitions of insurers and managing general agents (MGAs) and the capabilities of their current technology infrastructure.
The survey found that 86% of participants consider scalability essential for rapid speed-to-market. However, 71% reported that time-to-market remains their most pressing IT challenge, nearly twice the proportion who cited cost as a primary concern at 38%.
The research points to product development cycles as a key area where this gap is most evident. While 40% of insurers are introducing new products on a quarterly basis or more frequently, 73% acknowledged that their IT systems cannot scale quickly enough to support these launches.
Additionally, the survey found that 89% of insurers require customised software to deliver their products. This reliance on bespoke solutions is contributing to slower deployment times and operational frustration. The findings indicate a persistent operational bottleneck.
Although 68% of insurers are launching products at least once a year, many are unable to scale their technology to meet market demands, creating a competitive disadvantage.
Jim Campbell, chief commercial officer at Covernet, noted that: “Insurers are stuck in a scaling trap. They know speed-to-market is key, but their infrastructure is holding them back. When 71% of insurers say time-to-market is their number one IT challenge, it’s a clear signal that the current approach just isn’t working.”
Campbell added that the solution is not to slow innovation but to rethink IT scalability. “Insurers need platforms that allow for customisation without creating months-long delays," he said. "Otherwise, they risk losing ground to competitors who can move faster.”
The challenge of scaling technology is further complicated by the insurance sector’s growing interest in artificial intelligence. Insurers are increasingly using AI to accelerate product development, streamline customer service, and enable real-time risk monitoring.
However, legacy systems are slowing the pace of AI adoption and integration, making it difficult for many carriers to realise the full benefits of these technologies.
This technological divide is becoming more pronounced within the industry. Firms that successfully combine human expertise with AI-driven systems are achieving faster claims settlement, more precise underwriting, and improved risk selection.
As a result, the gap between technology leaders and lagging carriers is widening, impacting competitive positioning and customer expectations.
Insurtechs are at the forefront of technology adoption, particularly in cyber insurance, while traditional carriers with legacy infrastructure are slower to scale AI and digital solutions. This trend highlights the urgency for established insurers to modernise their systems if they wish to keep pace with emerging competitors and evolving market demands.
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