76% of London Market organisations expect their core systems will need significant integration, modernisation or transformation to support future AI and underwriting requirements, according to research from Federato.
The report, The London Insurance Market's Execution Gap: AI Ambition and Core Technology, surveyed 245 professionals at Lloyd's managing agents, company market insurers, MGAs, reinsurers, and brokers. 89% said operational speed cost them business to a competitor in the past 12 months.
58% said their organisation already uses AI in production, but only 24% believe incremental upgrades to their existing core will meet future needs. The top barriers cited were subscription and multi-party underwriting (43%) and multiple systems across the policy lifecycle (42%), while 38% reported difficulty connecting core with broker, bureau or settlement processes.
Firms that lost business on speed are 2.4 times as likely to make a unified platform or policy administration system modernisation their top technology investment over the next three years (50% v 21%). 71% of organisations running AI in business-critical workflows still lost business on speed.
42% said underwriting strategy changes take weeks or longer to reach day-to-day decisions. The top priority for AI and core modernisation was faster quotes and broker responsiveness (36%), ahead of underwriting margins (26%) and scaling premium without proportional headcount growth (25%).
"The research reveals a clear consensus: legacy core systems are too slow, and bolt-on AI can’t deliver what it promised," said Will Ross, CEO and Co-founder of Federato.
Ross is presenting the findings at Insurance Insider's London Market Conference on 11 November and at an InsTech event on 12 November.
Federato describes itself as an AI-native core system spanning the full policy lifecycle, replacing legacy policy administration systems with AI built into insurers' workflows.
