Technology reshapes insurance boardrooms amid legacy system concerns globally challenges

Technology is increasingly reshaping strategic discussions within insurance boardrooms, introducing new priorities that sit alongside traditional underwriting and capital allocation debates. What was once a peripheral topic has become central to executive decision-making, as insurers grapple with cyber risk, climate volatility and evolving market pressures.

Speaking during a keynote address, Will Ross highlighted how the day-to-day technologies used by senior leaders are now influencing board-level dynamics in ways that were not previously seen. These conversations, he noted, now extend well beyond conventional actuarial concerns, touching on cybersecurity threats, social inflation and the rising financial impact of climate-related catastrophes. Each of these factors has become embedded in the modern insurance landscape, reshaping both risk appetite and strategic planning.

Yet beneath these emerging priorities lies a structural challenge that continues to weigh on the industry. Ross pointed to the widespread reliance on ageing, on-premise core systems, describing them as a persistent constraint on progress. In his view, this legacy infrastructure remains particularly limiting in the Asia-Pacific region, where insurers are attempting to modernise while still operating on deeply entrenched technology stacks.

He also drew attention to the growing focus on artificial intelligence across the sector, warning that enthusiasm for advanced tools risks overshadowing the foundational issues that need urgent attention. While AI is frequently presented as a transformative force, he suggested that its effectiveness depends heavily on whether underlying operational systems are fit for purpose.

Ross challenged the assumption that resilience within the insurance sector equates to efficiency. The industry, he argued, has demonstrated an ability to withstand repeated cycles of disruption, yet this endurance has not necessarily translated into improved productivity or structural optimisation.

He illustrated this point through shifting performance patterns across insurers. Historically, combined ratios tended to converge within a narrow band, reflecting broadly similar operational outcomes across the market. More recently, however, divergence has emerged, with a clearer separation between higher- and lower-performing firms. According to Ross, this split reflects a deeper advantage: the ability to extract value from data effectively. Increasingly, he argued, this capability is being amplified by the adoption of artificial intelligence and generative AI tools.

Attention has therefore turned to automation as a potential route to improved efficiency. However, Ross cautioned against viewing automation as a universal solution. He warned that assuming benefits will naturally accrue from replacing manual processes could be misleading, particularly in an industry as structurally complex as insurance. Unlike software firms, where labour costs form the majority of expenditure, labour represents a relatively small proportion of insurance operating costs. This difference, he suggested, limits the gains that can be achieved through automation alone.

Instead, he called for a broader reassessment of where inefficiencies actually originate. In his analysis, the core challenge is not simply human workflow, but the way capital and risk are allocated across the insurance value chain. Inefficiencies, he said, often emerge through distribution layers and reinsurance structures, where multiple intermediaries extract value as risk is transferred and shared.

Ross also emphasised that advanced technological systems, particularly those involving autonomous decision-making, still rely on complex underlying dependencies. Without addressing internal process weaknesses, he warned, the introduction of new technologies could amplify rather than resolve inefficiencies.

The message to insurers, therefore, was clear: technological innovation must be matched with structural reform. Without this balance, the industry risks layering modern tools over outdated foundations, leaving core inefficiencies not only intact but increasingly entrenched.