The report underscores the challenges hindering the digital transformation of insurance programs, despite the burgeoning embedded insurance market anticipated to surpass $70 billion by 2030.

In a comprehensive survey encompassing hundreds of insurance industry leaders, Sure delved into the complexities of launching insurance programs digitally and the pivotal role of RSOs in this process. While RSOs are integral for providing rate, rule, and form filings, as well as essential services like loss analytics, the report reveals a staggering 71% of respondents expressing dissatisfaction with the effort required to utilize legacy RSOs effectively.

As consumers increasingly demand seamless digital experiences for insurance purchases, insurers and brands are racing to develop digital insurance programs. However, the arduous nature of working with legacy RSOs presents significant obstacles. According to Sure’s research, the extensive effort needed to initiate, maintain, and digitally launch insurance programs through legacy RSOs not only hampers efficiency but also limits consumer options, leading to inadequate coverage offerings unable to keep pace with market demands.

Furthermore, the report highlights the exorbitant costs associated with navigating legacy RSOs, with 75% of respondents disclosing annual expenditures of at least $1 million for program execution. Shockingly, 31% of participants reported annual spending exceeding $10 million. Despite substantial financial investments and labor-intensive efforts, only a mere 12% of respondents expressed high satisfaction levels with legacy RSOs.

Among the key concerns voiced by industry decision-makers, the report identifies the significant effort required (cited by 46% of respondents) and the lack of flexibility (mentioned by 31%) as major pain points. Interestingly, despite being top priorities, both factors contribute to dissatisfaction levels, underscoring the urgent need for transformative solutions in the digital insurance landscape.

Sure’s 2024 State of Digital Insurance Report serves as a wakeup call for the insurance industry, highlighting the imperative to address the inefficiencies plaguing legacy RSOs and accelerate digital transformation efforts to meet evolving consumer expectations in the digital era.

“Having spent almost a decade partnering with global carriers and consumer brands to build and launch digital insurance programs, these results are not surprising. The plumbing and pricing of the insurance industry is a mess and a big part of it is the incumbent RSOs who haven’t kept pace with the transition to fully digital insurance,” said Wayne Slavin, co-founder and CEO of Sure. 

“Carriers are spending up to $10 million a year on their RSO’s services to build and maintain their insurance programs, and yet the data shows that the pain points are everywhere and satisfaction is shockingly low. One would assume that with so much investment of time, effort, and money, satisfaction would be guaranteed, but it’s not. The industry needs a new way forward to provide modern solutions for carriers and, ultimately, for consumers who are seeking insurance options.”

Sure’s new survey underscores the difficulties that organizations face as they develop new insurance programmes in a market that has long been dominated by a handful of incumbent RSOs. As one respondent said, “We have not yet identified an RSO that provides the cost, value, and flexibility we are seeking.”