More than nine in 10 (93%) of APAC insurers admit that legacy technology constrains their business growth, even as 87% claim digital leadership over competitors, according to new research by investment management platform Clearwater Analytics.
The study, involving insurance asset management executives at firms with total assets under management of $3.82tn, found that 93% of respondents agreed older technologies are still driving future strategy and are proving to be a constraint on their business. The issue becomes more pronounced as firm size increases, rising from 90% of firms with assets of $1bn–$5bn to 97% of firms with $50bn or more in assets.
Almost three quarters of respondents (73%) said their organisation’s operating model is overly focused on short-term pressures rather than the longer-term challenges facing the business. This misalignment was most evident among larger insurers, rising from 67% of smaller firms to 90% of those with the largest asset bases.
Managing ageing systems is also creating growing resourcing challenges. More than half of executives (54%) said hiring staff with the skills needed to maintain legacy technology has become difficult, while 15% described it as a serious concern. Only two respondents said it was not an issue at all.
The study also found that just 26% of smaller insurers flagged recruitment as a concern, compared with 86% of the largest organisations. Three-quarters of respondents expect the problem to intensify over the next five years.
These technology issues appear to be compounded by cultural resistance. Nearly all executives surveyed (95%) said employees in the insurance sector are resistant to change and to the adoption of new operating models and systems, with little variation across firm size.
Workforce diversity also emerged as a key theme. Almost six in 10 respondents (59%) said structural problems in the sector stem from a lack of diversity — not only in background, but in ways of thinking. However, views differed sharply by role and organisation type, pointing to a potential leadership disconnect. While 74% of managers shared this view, only 48% of C-suite executives agreed. The divide was also evident between life and general insurers (75%) and third-party asset managers (28%), as well as between the largest firms (79%) and the smallest (56%).
Despite these challenges, confidence remains high. The vast majority of respondents (87%) believe their organisation is ahead of competitors in its digital transformation, with 19% saying they are significantly ahead. Just 1% of respondents said they were lagging.
Commenting on the research, Clearwater Analytics Chief Strategy Officer and President of Asia Pacific Shane Akeroyd said, “While APAC insurers show confidence in their digital progress, our research reveals a concerning gap between perception and operational reality that could impact competitive positioning as the sector consolidates.”