This piece is by David Phull, Group Vice President – EMEA, Guidewire
For the past decade, insurers have been racing to modernise their systems and practices in response to increased competition, the acceleration of claims and the changing expectations of policyholders.
A closer look at the strategic choices and the investments made reveal that insurers have primarily focused on improving customer experience by leveraging CRM tools, enhancing customer portals, and developing mobile applications.
While modernisation has improved the customers’ digital experience, streamlined interfaces, enriched customer journeys, other core business systems have been neglected. Moving into 2026, it’s important for insurers to consider which other functions are still in need of digitisation for a more holistic modernisation of the sector.
Silos – The Real Barrier to Modernisation
Over time, insurers have done a great job in developing their systems and functions, from pricing and risk assessment to underwriting.
However, systems used in these areas often remain siloed and relatively isolated. There are real difficulties in making connections and sharing data with key functions that would improve the business and create greater efficiencies. Overall, these silos become structural bottlenecks that can prevent a business from meeting its objectives.
For the insured, this means that key steps, such as obtaining a quote, signing a contract, filing a claim, or canceling a policy are lengthy, fragmented, and often frustrating. No matter how polished or how well-designed the user interface is, if the system is not well integrated across functions, it will not provide useful or accurate results.
This becomes even more problematic with increasing regulatory pressure. For example, the Financial Data Access (FIDA) regulations, which promotes open insurance, data portability, and requires insurance processes to be available to external partners, urges insurers to make their operations simpler and more responsive. This means that any siloed systems need to be eliminated.
Pricing – The Key to Remaining Competitive
According to our European insurance consumer survey, almost 80% of UK policyholders say they are ready to switch insurers mainly due to budgetary reasons that are triggered by inflation.
Pricing is a complex mechanism that involves setting the right price, at the right time, for the right risk, and to the right person. This equation is impossible to master with a siloed system. If data is scattered and the process is not seamless, the calculated price will only be an estimate and risks being poorly suited to the customer. As a result, this could cause the insurer to lose customer loyalty and trust in the market.
This reveals the difference between superficial modernisation and profound transformation. Insurers committed to transforming their core systems, centralising their data, streamlining their processes, and industrialising their pricing will gain a significant advantage. Those who choose to just patch up the gaps with cross-cutting layers risk losing ground in the fiercely competitive insurance market.
The Road Ahead Needs Integration
The good news is that insurers are realising they need to address these areas of significant friction and broken processes, especially for pricing. In 2026 we expect to see a shift in the insurance sector with more recognising the importance of integrated platforms in managing the entire customer lifecycle. From pricing and underwriting to billing and claims management, insurers will be looking for a seamless connection.
In addition to delivering greater operational efficiency, this integration is necessary for leveraging artificial intelligence (AI), and in particular generative AI (GenAI), which requires centralised, consistent, and real-time accessible data. In comparison, a siloed environment contributes to creating inconsistencies and errors when using AI.
It is essential to have an open, modernised, and integrated core system, helping insurers to take full advantage of the potential that AI can offer, including dynamic pricing, personalised advice, and automated claims processing.
The partial modernisation strategy insurers have adopted in recent years is reaching its limits. Faced with policyholder expectations, increasingly stringent regulations, and pricing becoming a central adjustment variable, insurers can no longer rely on a siloed system incapable of driving the necessary transformations.
To get back on track, modernisation must be structural and holistic. Those who have the courage to take on this approach will have a decisive lever to retain their customers and enhance their competitiveness. The others will remain trapped in an inherited system, spectators of a transformation they failed to anticipate.
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