Look before you leap: core insurance transformation demands preparation, not just speed

Our recent in-depth study of major insurers reveals that while transformation is dominating the agenda, careful preparation cannot be overlooked.

The European P&C insurance market is in the midst of unprecedented change. A major BearingPoint study – covering 500 clients, 100 insurance vendors – reveals a perhaps surprising truth: 80% of insurers are already modernizing their core systems. Some are moving faster than expected, others are holding back. But all face the same pressures: efficiency demands, time to market, strategic agility, and a looming talent and technology gap.

The pace of change

The old stereotype of a slow-moving sector no longer holds. Our research, Kaleidoscope for Insurance:2025, shows that only 19% of insurers view their position as “stable”, while nearly half of those surveyed expect to revisit this status within two years. Meanwhile, 36% are actively undergoing transformation, and another 45% are about to begin the process of finding a new solution.

Combined with those who have already modernized their core systems, around 80% of the market is either in motion or preparing to move. This is not a sector idling at the start line. It’s already running the race.

The question is no longer if insurers will transform. It’s how well prepared they are to ensure their programs are successful.

The risks of rushing in 

While the momentum is undeniable, so are the risks. Many core transformation projects stall or underdeliver because organizations move too fast without clear alignment or preparation.

Too often, business leaders and IT teams are not aligned on the goals or broader scope of the program. The right people don’t have the mandate to lead change. Functional requirements are not fully defined at the outset. And in multi-year initiatives, which can span from three to ten years, unclear starting points only amplify complexity and drift.

Crucially, aiming to simply “get off the mainframe” is not a business outcome. The most successful transformations are anchored in clear, measurable goals tied to performance, growth, or customer value.

And with skill shortages deepening, both within insurance companies and among tech vendors, the few professionals who understand business, technology, and change in the market are in high demand.

To ensure plans don’t falter, it’s essential that the right capabilities are put in place first.

Choosing the right technology partner

Once the groundwork is laid, choosing the right technology partner becomes a strategic decision – not just a procurement exercise.

The trend towards standard software is clear, but the choice is far from straightforward. Our research revealed just how complex that decision can be. In this study, the German market’s scale makes it particularly interesting from a provider analysis point of view, but the lessons apply across Europe.

When asked about the future of the vendor market:

• 68% of insurers anticipate consolidation
• 30% foresee disruption from new entrants, including major technology players
• 12% predict that insurers themselves will become technology providers

In making their decisions, insurers are prioritizing business functionality, flexibility, and trust over vendor size or price. References, technical fit, and market experience still matter, but the ability to deliver in a collaborative, future-ready way is what ultimately defines success.

The road ahead

Looking ahead, core insurance platforms of the future will look very different to those in place today. SaaS and service-based models will become the dominant delivery approach, replacing most on-premises deployments. Core systems themselves will increasingly serve as systems of record, while process management, customer engagement, and analytics shift to AI-enabled specialist platforms.

We also expect significant consolidation in the vendor market, as a crowded field narrows to fewer, stronger players with pan-European reach. These changes will redefine what insurers expect from their technology and from the partners who implement it.