Insurance Technology Has Entered Its Advice Economy

This piece is by Liselotte Munk, CEO, Fadata.

For much of my career in insurance technology, the conversation has centred around capability. Can a platform support new products, automate processes, improve customer experiences? Can it help insurers become more efficient? Those questions still matter, but I believe the conversation is changing, and rightly so.

Having spent more than 30 years focused solely on insurance technology, at Fadata, we have seen many shifts in the industry, namely transformation to modern platforms, the introduction of automation, and the adoption of digital ecosystems. Throughout that time, one thing has remained consistent: successful transformation is never just about technology, it is about understanding the business behind it.

Today, technology has matured so quickly, that strong functionality, modern architecture, cloud readiness, APIs, automation and increasingly AI capabilities are all now expected. They are of course important, but they are no longer what sets technology partners apart. Now, insurers are looking for confidence. They need to be sure that their technology partner understands insurance, that they have solved similar challenges before, and be confident that they can help navigate uncertainty, not just deliver software. Perhaps the better word is trust. I believe this is creating a new era for insurance technology: the advice economy.

AI is increasing the need for expertise, not reducing it

AI is a perfect example of the shift to prioritising confidence over technology. Every insurer is exploring AI, and every leadership team is asking what it means for their business. The most important question not being “where can we add AI?” rather, “where will AI genuinely create value?” What insurers need and how AI can add value is better customer experiences, better decision making and, of course, lower operational costs and faster processes. The technology is only valuable when it solves a real business challenge. Some examples could be in claims and billing.

Claims is an area where AI can make a meaningful difference because it is perfectly designed to tackle high volumes of repeatable processes. Helping insurers automate administrative tasks, improve accuracy and speed up settlement can deliver real benefits. Billing is another area with significant AI potential as it removes friction where processes around reconciliation, payments and coverage validation can be complex and time-consuming. Health insurance would greatly benefit.

But not every process should be treated the same way – in some instances human judgement is essential. Take underwriting as an example. It is one of the most important and complex parts of insurance, and it carries significant regulatory responsibility. AI can help underwriters access information faster, identify patterns and make better decisions, but not

without human intervention. I have very strong feelings on the human role in AI and will shout from the rooftops that the future is not about replacing expertise. It is about enhancing it.

The challenge is not accessing AI. It is controlling it.

Conversations around AI are steering towards resilience, governance and trust. Capability can be explored but it is the bigger questions that require more careful consideration and experienced, human guidance to provide insurers with peace of mind.

The speed of AI development has created enormous opportunities, but it has also created uncertainty. Insurers are rightly starting to ask important questions such as how do we make sure our data is protected? How do we manage compliance? Avoid becoming dependent on a technology provider or model that may change direction? How do we know today’s investment will still support tomorrow’s business? These are not simple questions.

Insurance as we know is a long-term industry. Core systems are expected to support businesses for many years, and decisions made today need to stand the test of time. This is why issues such as data sovereignty are becoming increasingly important, particularly in Europe. Insurers need confidence that they remain in control of their technology, their data and their future options.

AI success starts long before the AI model

One thing has become increasingly clear: AI is only as good as the foundations beneath it. Before talking about models, insurers need to think about data quality, architecture and integration. Poorly structured data creates poor outcomes, limited connectivity creates barriers, while legacy systems create technical debt, and increasingly, technical debt becomes AI debt. This is where modern insurance platforms and specialist expertise become so important.

Insurers do not simply need another technology layer added to an already complex environment. They need platforms and partners that understand how insurance operates and how technology can evolve alongside changing business needs. The insurers that succeed with AI will not necessarily be those that choose the most advanced model. They will be those that have built the flexibility to adapt as technology changes. Because technology will continue to evolve, today’s leading AI solution may look very different in a few years. Remember, the goal is not to predict the future perfectly, but to be ready for it.

Moving beyond AI pilots

The insurance industry has already seen plenty of AI experimentation. Proofs of concept have shown what is possible. The next challenge is turning those ideas into sustainable business value, understanding where AI fits, how it should be governed and how it can be introduced without creating unnecessary risk. Here, experience and the advice from those with experience, very much matters!

Now, more than ever, insurers are seeking the partners that can help them to understand the opportunities, navigate the risks and make decisions that support their long-term objectives. In a market where innovation is moving faster than regulation, this is especially prudent, and the right partner will be the one that is perfectly positioned and experienced to support insurers to bridge that gap between possibility and practicality. Sometimes that means helping identify where AI can deliver value, other times it means advising where caution is needed. Both are equally important.

The future belongs to trusted partners

The insurance industry is built around managing uncertainty, making the role of trusted partnerships even more important. As AI continues to develop, regulation continues to evolve and customer expectations continue to change, insurers will need partners who understand both the opportunities and the challenges, as well as technology.

At Fadata, our focus has always been insurance. Instead of trying to serve every industry, we have spent decades understanding one. That specialisation has allowed us to build deep industry knowledge, long-term relationships, and a practical understanding of the challenges insurers face, and over the years, we have naturally stepped into the role of trusted advisor. Why that matters, is because successful transformation is not about adopting every new technology, it is about making the right choices.

Technology creates possibilities, but it is people who create confidence. Technology will continue to change, while the need for expertise, trust and human judgement will not. And that is why I believe insurance technology has entered its advice economy. The future of insurance technology will not be defined only by smarter platforms – it will be defined by stronger partnerships.