The gap between digital leaders and laggards in insurance is widening because of how technology is executed, not “simply the amount they spend”.

Global insurance data standards group the Association for Co-operative Operations Research and Development says maturity of technology determines whether AI ambitions “translate into durable advantage”.

“Insurers can only scale AI where the organisation already has modern, integrated front-to-back capabilities. Data standardisation is a key prerequisite to effectively leveraging AI,” ACORD senior VP Dave Sterner said.

“Insurers that treat digitisation as an integrated business system spanning technology, data, operating models, culture and governance are best positioned to outperform in an increasingly complex and competitive market.”

ACORD analysis of 210 insurers found only 7% rank as top “digital competitors”, with success determined by “how effectively they convert digital capability into execution and outcomes”.

These businesses exceeded average profitability among the insurers studied, and demonstrated the highest growth in profits over the past 10 years.

“For many insurers, core back‑office operations remain largely manual and siloed, with digital efforts treated as a collection of discrete projects rather than a co-ordinated, enterprise‑wide transformation program,” ACORD said.

The insurers studied fell into five categories:

• Digital competitors (7%) – market leaders leveraging end-to-end digital capabilities to shape customer behaviour and strengthen strategic positioning.
• Digitalised firms (23%) – using digital to improve efficiency across core operations, with benefits visible at scale.
• Digital aspirations (43%) – actively investing in digital but still building the models needed to realise full value.
• Localised digitalisation (20%) – applying digital in isolated areas to solve siloed problems. Often cost-driven, without end-to-end integration.
• Digital laggards (7%) – limited digital awareness and minimal execution, leaving capabilities fragmented, manual or deprioritised.

Find the report here.