Blog: Why digital transformation fails – and how insurers can flip the script

A few smart steps can help insurers derive greater value from their transformation efforts, says Acini’s Michał Stanik

The insurance industry is no stranger to the phrase ‘digital transformation’. For the last 10 of my 20 years in the insurance industry, it has been the cornerstone of boardroom strategies, keynote speeches and IT investments. Yet, despite billions spent, many carriers are still wrestling with the same core challenges: legacy systems, fragmented data, siloed departments and underwhelming customer experiences. Not to mention cost overruns, which are reported by approximately 60% of financial institutions, including insurance companies (Source: Consultancy.com.au).

Why is it then, that digital transformation so often fails to deliver?

The illusion of transformation
Too many initiatives are, in truth, just expensive digitisation projects. Replacing paper forms with online portals or migrating infrastructure to the cloud can be valuable steps, but they are not transformational in and of themselves. Within this area, the greatest headache for insurers is data migration. According to Gartner, an astounding 83% of such projects exceed budgets and timelines. True digital transformation should change how an insurer operates, delivers value, and adapts to market needs. Without a clear vision beyond ‘modernisation’, projects risk becoming technology-first rather than value-first.

Without a clear vision beyond ‘modernisation’, projects risk becoming technology-first rather than value-first.

Michal Stanik, Acini

The legacy labyrinth
Legacy systems are often painted as the villains of transformation stories and, while they can be, the real problem is not their existence, but how they’re handled. Ripping and replacing core platforms is risky, expensive, and can take years. The smarter path? Integration. Leveraging modern APIs, low-code solutions and data orchestration layers allows insurers to gradually decouple from legacy constraints while delivering quick wins.

Technology without traction
A shiny new tech stack does not equal success. Tools like AI-driven underwriting or real-time analytics only work when embedded in workflows that make sense to the people using them. Too often, tech is implemented top-down, without sufficient buy-in from underwriters, claims handlers, or brokers. Successful transformation requires co-design, not just deployment.

How can insurers flip the script?

Think big, start small, scale fast
The most successful insurers take an agile approach: focus on specific pain points, deliver targeted solutions and iterate. By starting with a narrow but high-impact use case – such as automating first notification of loss (FNOL) in commercial lines – you create momentum and measurable value.

Prioritise change management as much as technology
Transformation is 20% tech and 80% culture. That means engaging stakeholders early, providing training and rewarding adoption. When users feel heard and empowered, they become champions, not blockers.

Choose the right partners
Digital transformation isn’t a solo sport. The right system integrator should bring not just technical skills but also domain knowledge, business insight, and the agility to adapt as your needs evolve. At Acini, we believe success comes from co-creation. Our teams work side-by-side with insurers to shape, deliver, and scale solutions that actually work in the real world.

Design around the customer
It’s easy to get lost in internal processes and systems. But ultimately, transformation should lead to better experiences for customers – faster claims, more relevant products and seamless digital journeys. If you’re not measuring progress against customer value, you’re measuring the wrong things.

Preparation
But before a digital transformation begins, there is an essential phase that sets the stage – I’m talking about proper preparations. It is a critical phase to ensure success and avoid costly setbacks. It includes assessing IT infrastructure, securing data governance, upskilling employees and aligning initiatives with business goals. With the right groundwork, companies can drive efficiency, compliance and long-term digital growth.

It’s time to reframe the transformation narrative
Digital transformation isn’t a project. It is a mindset. It’s about becoming more adaptable, more connected and more focused on delivering value at speed. The technology is ready. The market demands it. The real question is: can insurers lead with purpose, not just platforms?

This remains to be seen. The insurance industry has no choice but to march forward. The technology is ready. If we don’t forget to “ask for directions” from the customers, we have a chance to stay on the right path. 

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