Insurers Face up to $5M in Hidden Operating Model Costs

A field study commissioned by INTX and conducted by RSM surveyed more than 250 property and casualty insurance professionals. The findings paint a picture of an industry where inefficiency is systemic, not episodic. Billions spent on technology have not solved the core problem: a fragmented operating model.

Implementation costs are the first pain point. Organizations spend an average of up to $1 million to deploy a single system, according to the study. With most insurers running two or three such systems, total deployment costs can reach $3 million or more. More than half of system users depend on third-party integrators for training. 40% rely on them for project management and implementation.

Support costs extend well beyond licensing. Insurers pay between $100,000 and nearly $5 million annually on recurring system costs, researchers said. Nearly half of organizations report significant additional internal IT support expenses. Teams spend time maintaining outdated systems, resolving issues, and supporting users. The study estimates up to 888 hours of lost productivity each year due to system issues, with a financial impact as high as $450,000 annually.

Manual processes remain deeply embedded. 72% of respondents reported using Excel or homegrown tools to manage critical workflows. 52% of policy administration tasks require human intervention. Employees move between systems, reenter data, and reconcile information. Organizations spend between $475,000 and $1,125,000 each year on manual work, the study found.