Singapore insurers face 98% legacy tech drag

Ninety-six per cent cited resistance to change as a barrier to new ways of working.

Singapore insurers say they are ahead in digital adoption, but most also admit that older systems are still limiting their growth.

The study, which surveyed asset management executives at Singapore-based insurers overseeing a combined $1.04t in assets, found that 82% believe they are ahead of competitors in adopting digital systems, according to new research by Clearwater Analytics.

However, 98% said legacy technology continues to hold back their business, highlighting a gap between perception and operational reality. 

“Whilst Singapore insurers show confidence in their digital progress, our research reveals a concerning gap between perception and operational reality that could impact competitive positioning as the sector consolidates,” Shane Akeroyd, Chief Strategy Officer and President of Asia Pacific at Clearwater Analytics, said in a statement.

Nearly all respondents said older systems are still shaping their future strategy and constraining performance. 

Around 70% also said their operating models focus too much on short-term priorities rather than long-term challenges. 

Workforce issues are adding to the strain. Half of those surveyed said hiring people to manage legacy systems is a problem, with 8% describing it as serious. None said recruitment was not an issue. 

At the same time, 96% pointed to resistance to change within organisations as a barrier to adopting new systems and ways of working. 

“There are worrying signs that those working in these businesses lack confidence in the long-term capability of their organisations to deliver their full potential,” Akeroyd said.

Cultural factors appear significant, with 72% saying problems in the sector are linked to a lack of diversity, including differences in thinking and experience. 

Despite these challenges, most insurers remain confident in their position. 

Whilst 82% see themselves as ahead of competitors in digital transformation, none believe they are falling behind, and 18% said they are in line with peers. 

There is also optimism about operating models, with 94% saying they are flexible enough to respond to new challenges. 

Looking ahead, insurers expect increased consolidation in the domestic market. 

“With 94% of Singapore insurers expecting increased mergers and acquisitions activity, those that close the gap between digital confidence and operational reality will be best positioned to lead consolidation rather than become a target of it – and those that do not may find their operating models are not as flexible or scalable as they had believed,” added Akeroyd.