Digital Engineering Reshapes Insurance Operations, Innovation
MWN-AI** Summary
The insurance industry is undergoing a significant transformation through the adoption of digital engineering, as highlighted in the 2025 ISG Provider Lens® global Insurance Services report. Incumbent insurers are modernizing their technology foundations to enhance speed, efficiency, and overall policyholder experience by replacing outdated legacy systems with advanced platforms. This modernization is crucial, as many insurers face escalating maintenance costs associated with decades-old technology that hampers the introduction of innovative products and integration of analytics and AI.
According to Dennis Winkler, director of Insurance at ISG, digital engineering is pivotal for insurers to remain competitive against digital-first challengers. The report emphasizes that insurers are upgrading core systems to cloud-native platforms, which increase agility and reduce operational friction. Many are replacing or refactoring legacy systems related to policy administration and claims processing. These changes are designed to facilitate phased transitions that mitigate operational risks while enhancing service delivery speed.
API-first integration strategies are further transforming how insurers manage data, streamline interactions, and improve transaction accuracy across channels. By implementing API strategies, insurers can create reusable functions for tasks like quoting and claims filing, thereby unifying data and reducing friction for policyholders. Additionally, the shift towards cloud infrastructure and DevOps practices allows for tightened development cycles, enabling quicker responses to regulatory changes and market dynamics.
The report identifies leading service providers in digital engineering, including Atos, Capgemini, and Cognizant, and recognizes Sutherland as the top performer in customer experience within the industry. Overall, investments in strong engineering foundations are expected to enhance operational efficiency and customer satisfaction in the evolving insurance landscape.
MWN-AI** Analysis
The insurance industry is undergoing a significant transformation as companies increasingly embrace digital engineering, a trend catalyzed by the urgent need to modernize legacy systems and enhance policyholder engagement. According to the latest ISG Provider Lens report, insurers are compelled to update their technology foundations, focusing on cloud-native platforms and API-first integration to mitigate rising operational costs and outdated tools. This modernization wave targets stagnant premium growth and declining customer satisfaction, and presents an essential opportunity for major players in the insurance sector.
Investing in digital engineering not only improves agility and operational efficiency but also optimizes the policyholder experience. Insurers that replace old systems with modern architecture report smoother workflows and faster service delivery. This shift enables a unified approach to quoting, binding, and claims processing across both digital and agent-supported touchpoints, streamlining interactions and enhancing user satisfaction.
Given this landscape, insurers looking to remain competitive should prioritize partnerships with recognized service providers in the digital engineering space, as highlighted in the report. Firms like Atos, Capgemini, and Infosys have been acknowledged as leaders, offering advanced capabilities necessary for successful digital transformation.
Furthermore, adopting DevOps practices and automated testing can significantly reduce the time to market for new products while ensuring product quality amidst regulatory changes. Carriers that integrate these methodologies not only gain a competitive edge but also position themselves to respond swiftly to industry demands.
Overall, organizations that prioritize digital engineering investments and modern technological frameworks can expect to see accelerated growth, better customer outcomes, and increased resilience against market disruptions. For insurers, now is the time to act—modernization efforts will prove vital in navigating the complexities of the evolving insurance landscape.
**MWN-AI Summary and Analysis is based on asking OpenAI to summarize and analyze this news release.
Insurers are modernizing technology foundations to improve speed, efficiency, policyholder experience, ISG Provider Lens ® report says
Incumbent insurance companies are adopting digital engineering to replace legacy systems with modern platforms that enable faster product delivery and improved policyholder engagement, according to a new research report published today by Information Services Group ( ISG ) (Nasdaq: III ), a global AI-centered technology research and advisory firm.
The 2025 ISG Provider Lens ® global Insurance Services ? Strategic Capabilities (Insurance Digital Engineering Services) report finds that insurers are contending with technology foundations built over decades that incur rising maintenance costs, restrict integration of analytics and AI and slow the introduction of new products. Many carriers are investing in modernization to reverse stagnant premium growth and address declining policyholder satisfaction that may be caused by fragmented channels and outdated tools.
“Digital engineering has become essential to insurance industry transformation,” said Dennis Winkler, director, Insurance, at ISG. “Incumbent insurers need modern architectures, development methods and organizational structures to compete with digital-first challengers. Digital engineering is the core capability for succeeding in that transition.”
Insurers are upgrading core systems with cloud-native platforms that improve agility and reduce operating friction, the report says. Many are replacing older systems for policy administration and claims or refactoring components to overcome their dependence on mainframes. These upgrades allow for phased transitions that reduce operational risk while improving the speed of service delivery. Carriers that adopt modern platforms report better alignment between business and technical teams and more consistent product updates in response to market and regulatory changes.
Modernization efforts increasingly rely on API-first integration to unify data and streamline interactions across applications and channels, ISG says. Insurers are implementing API strategies that turn functions such as quoting, binding and claims filing into reusable services. These services enable seamless handoffs between digital and agent-supported touchpoints, reducing friction for policyholders and improving transaction accuracy. Integration platforms are helping carriers coordinate workflows across multiple systems without compromising data integrity.
By adopting cloud infrastructure and DevOps practices, insurers are also tightening up development cycles, the report says. Elastic compute services reduce operational overhead while providing secure environments for regulated workloads. DevOps methods, including automated testing and continuous integration and continuous delivery (CI/CD), allow teams to update software in less time and ensure consistent quality. These capabilities help insurers respond to regulatory requirements and competitive pressures without lengthy development efforts.
“Insurers that invest in strong engineering foundations improve speed, stability and customer outcomes,” said Ashish Jhajharia, lead author of the report. “Service providers play key roles in helping enterprises adopt these methods at scale.”
The report also explores other trends in digital engineering for insurance, including the increasing importance of unified data environments for analytics and the need for stronger resilience engineering across modern architectures.
For more insights into the technology-related challenges faced by insurance enterprises, plus ISG’s advice for overcoming them, see the ISG Provider Lens ® Focal Points briefing here .
The 2025 ISG Provider Lens ® global Insurance Services ? Strategic Capabilities (Insurance Digital Engineering Services) report evaluates the capabilities of 20 providers in one quadrant: Insurance Digital Engineering Services.
The report names Atos, Capgemini, Cognizant, HCLTech, Infosys, LTIMindtree, Persistent Systems and Tech Mahindra as Leaders in the quadrant.
In addition, Coforge and ValueMomentum are named as Rising Stars — companies with a “promising portfolio” and “high future potential” by ISG’s definition — in the quadrant.
In the area of customer experience, Sutherland is named the global ISG CX Star Performer for 2025 among insurance industry services providers. Sutherland earned the highest customer satisfaction scores in ISG's Voice of the Customer survey, part of the ISG Star of Excellence™ program , the premier quality recognition for the technology and business services industry.
Customized versions of the report are available from Coforge and ValueMomentum .
The 2025 ISG Provider Lens ® global Insurance Services ? Strategic Capabilities (Insurance Digital Engineering Services) report is available to subscribers or for one-time purchase on this webpage .
About ISG Provider Lens ® Research
The ISG Provider Lens ® Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across Europe, as well as in the U.S., Canada, Mexico, Brazil, the U.K., France, Benelux, Germany, Switzerland, the Nordics, Australia and Singapore/Malaysia, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage .
About ISG
ISG (Nasdaq: III ) is a global AI-centered technology research and advisory firm. A trusted partner to more than 900 clients, including 75 of the world’s top 100 enterprises, ISG is a long-time leader in technology and business services that is now at the forefront of leveraging AI to help organizations achieve operational excellence and faster growth. The firm, founded in 2006, is known for its proprietary market data, in-depth knowledge of provider ecosystems, and the expertise of its 1,600 professionals worldwide working together to help clients maximize the value of their technology investments.
View source version on businesswire.com: https://www.businesswire.com/news/home/20251218440756/en/
Press Contacts:
Laura Hupprich, ISG
+1 203-517-3100
laura.hupprich@isg-one.com
Julianna Sheridan, Matter Communications for ISG
+1 978-518-4520
isg@matternow.com
FAQ**
How is the research by Information Services Group Inc. III indicating that digital engineering can transform incumbents' operational efficiencies within the insurance industry?
What specific modernization strategies are insurers utilizing, as highlighted by Information Services Group Inc. III, to enhance policyholder satisfaction and reduce maintenance costs?
In what ways do cloud-native platforms and API-first integration, as discussed in the Information Services Group Inc. III report, improve the agility of insurance companies?
According to Information Services Group Inc. III, what role do service providers play in supporting insurers’ digital engineering efforts and ensuring successful transitions to modern systems?
**MWN-AI FAQ is based on asking OpenAI questions about Information Services Group Inc. (NASDAQ: III).
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