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Delay in core system modernization can cost insurers lost growth and business
A 2025 West Monroe Partners survey found 94% of US insurance executives delayed or cancelled strategic technology programs for budget reasons in the past year.
Insurance Business reports that delaying core system modernization can create a compounding opportunity cost for carriers, including lost business, weaker competitiveness, slower product launches, rising service gaps, and talent erosion well before legacy technology visibly fails.
The outlet cites a 2025 West Monroe Partners survey of 300 US insurance executives, which found more than half spend between 51% and 75% of their IT budgets just to keep existing systems running, and 94% said strategic technology programs were delayed or cancelled for budget reasons in the prior year.
Vineet Bansal, chief information and technology officer at The Mutual Group, breaks down modernization delay costs into four buckets: maintaining legacy technology, the cost of delayed growth, legacy-specific staffing expenses, and the cost of lost business outright. He says older systems are harder to maintain, but the bigger issue is lost opportunity tied to slower quoting and servicing, weaker digital access, and broader cybersecurity and controls exposure.
Bansal also points to early indicators that a carrier’s technology has become a liability, even while operations still run, including rising operating costs, increasing manual workarounds, recurring production issues, longer change cycles, vulnerabilities that cannot be fully addressed on existing platforms, and slower product launch timelines.