Australian insurers struggle to turn tech plans into results

Finity has published a survey showing most general insurers in Australia and New Zealand have technology strategies but are struggling to deliver them. The findings identify integration speed as a key constraint on returns and broader AI adoption.

The study found 77% of senior insurance leaders surveyed had a documented technology strategy, and 73% said a named executive was accountable for delivery. Yet only 29% reported major advances in the past year, suggesting a gap between planning and execution across the sector.

That gap is most visible in the time it takes insurers to connect new systems and tools to existing operations. Almost three-quarters of respondents said it takes months or longer to integrate a new technology component: 37% said months and another 37% said more than a year.

Integration speed also appears closely tied to whether technology spending delivers the expected result. Among organisations that can integrate a new component in weeks or less, 87% said their investment met or exceeded expectations. For those taking more than a year, that figure fell to 30%.

Edward Owen, Principal and Head of Product Development and Innovation at Finity, said long implementation schedules can distort expectations around new projects.

"We find that protracted timeframes for implementation tend to inflate expectations for delivery and perceived payoff," he said.

"When expectations are set too high, the pressure to deliver can feed on itself, driving scope creep, shifting objectives and an ever-expanding delivery burden."

He said delays often extend beyond the technical task of connecting systems. Process changes, data ownership, governance and internal confidence in new ways of working can all slow delivery.

"The timeline is set as much by the surrounding work as by the connection itself: agreeing new processes, establishing data ownership, redefining governance, and building confidence in unfamiliar ways of working, all at scale. When a modular approach is taken, transformation happens in chunks, reducing complexity and minimising operational disruption at any one time."

AI adoption

The findings also show broad use of AI and machine learning, but limited scaling across insurers. While 87% of respondents said they had deployed AI or machine learning somewhere in the business, only 11% said it had been scaled across multiple areas.

Integration with existing systems ranked as the biggest barrier to scaling AI, cited by 33% of respondents. That put it ahead of talent at 23%, while budget ranked last at 7% for AI scaling, even though it was the most commonly cited challenge in delivering technology strategy overall, at 29%.

The pattern suggests insurers are using AI first in lower-risk parts of the business rather than in functions where mistakes could carry greater regulatory or governance consequences.

Dylan Neenan, Head of AI Solutions at Finity, said AI is being extended first into places where the cost of a mistake is lowest and held back where the consequences are more severe.

"That is a defensible sequencing decision, not a maturity failure, though it does mean the hardest, highest-value applications are the ones yet to be broached."

Data quality emerged as another dividing line in how far insurers have progressed. Organisations that trust their data were more than twice as likely to have scaled AI somewhere in the business as those that did not, at 52% compared with 23%.

Neenan said data quality is a prerequisite for moving AI beyond pilots into production.

"Without trust, pilots cannot eventuate to more than a tech demo. AI models are not magic, and waiting for stronger frontier models is rarely the solution. AI will only produce reliable results when fed reliable data."

System design

The report also linked integration speed to the way insurers have built their technology estates. Among respondents operating modular and connected systems, half said they could add a new component in weeks or less, and only one in five said the process took more than a year.

By contrast, insurers working with older, more siloed systems were far less likely to move quickly. Almost none in that group could integrate a new component in weeks or less, while half took more than a year.

Confidence in the sector's three-year technology outlook stood at 82%, according to the survey. Finity said confidence was tied more closely to delivery than to the existence of a formal strategy.

Marcello Negro, Director and Head of Product Management at Finity, said the sector broadly has the right strategy in place, clear ownership and high confidence.

"The harder things are the pace of delivery, the connective foundations and the trusted data that turn a documented strategy into a delivered outcome. This report describes the gap, and for insurers, closing it is the focus of the next three years."