Insurance and Technology – The Unvarnished Truth
Insurance and Technology – The Unvarnished Truth
Publish Date: 2026-04-24 09:09:00
Source Domain: www.finews.com
In this column, authors provide commentary on economic and financial topics.
For more than a decade, the industry has been telling itself the same story: disruption is imminent. Artificial intelligence will soon make underwriting obsolete. An InsurTech will redefine the market.
None of this has materialized. And for reasons that are rarely articulated openly: insurance is not a digital lifestyle product—it is a core component of the financial system, built on highly resilient mechanics.
Interest rates outweigh AI. Claims inflation outweighs chatbots. A single mispriced industrial risk can wipe out any efficiency gains achieved through process automation.
Technology: More Risk Than Innovation for Many
In presentations, technology is celebrated as a key growth driver. Behind closed doors, the narrative is far more cautious:
- «We can no longer find anyone who fully understands our core system.»
- «We are increasingly concerned about cyber risk.»
- «We are unsure whether our data quality is sufficient.»
- «The next major IT program could result in another multi-million write-off.»
«The industry is investing billions in technology, yet productivity gains remain modest.»
This is the industry’s reality. And it explains why, in many cases, IT functions primarily as a stabilization mechanism, rather than a driver of new business models.
Productivity Gains? Limited at Best
The sector continues to allocate billions to technology, yet productivity improvements remain subdued. Why? Because in insurance, a single mispriced risk can instantly offset gains from more efficient back-office processes.
Moreover, many technologies trigger a paradoxical arms race: AI enhances claims assessment while simultaneously enabling more sophisticated fraud schemes. The net benefit is often negligible.
This dynamic echoes the observation by Robert Solow: «You can see the computer everywhere but in the productivity statistics.»
Opting Out of Technology Is Not an…
