Top 5 challenges facing the insurance industry

While it is not unheard of for insurers to devote 80% of their IT budgets to maintaining legacy systems, Duck Creek reported there are four solutions to rectify issues with outdated systems. (Credit: treety/Shutterstock.com)

The insurance industry has been in a state of flux, with new technologies, data-driven processes and growing customer demands being major drivers behind this time of change. And while many changes are good — such as the digital transformation of insurance and what that has meant for companies and customers alike — some of these changes have resulted in the industry facing its share of new challenges.

Here is a look at some of the biggest challenges facing the insurance industry, along with ideas and innovations to solve them:

1.  Digitizing small commercial

 A niche but profitable market within the insurance industry is small business insurance, otherwise known as small commercial. While this section of the market had been relatively insulated from outside pressure to modernize and get on board with digital technologies, that is no longer the case. Larger, more aggressive insurers understand the value of small commercial and are making a push to move into this market and update it. This is forcing carriers who already offer small commercial to significantly invest in new digital technologies to keep up with their competitors.