During the pandemic, the focus was on ‘going digital.’ Now, looking ahead to 2026, the approach is more intentional.
Many current insurance tech stacks have tools and platforms that once seemed useful but no longer move the business forward. Insurance companies are now asking a harder question: what should stay in their tech stack, and what should they take out?
What Must Stay and Be Doubled Down On
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Cloud-Native Core and Flexible Architecture
Cloud technology has become essential. Today’s insurers are leaving behind rigid, old systems and choosing cloud-native platforms and modular designs.
This process helps them launch products faster and lower their operating costs. It is also important to have a flexible, API-first infrastructure.
This aspect makes it easier to connect with partners and other systems. Modular setups enable faster, issue-free updates, and event-driven designs support real-time decision-making.
These systems matter because speed is now a major advantage, and older core systems cannot keep up.
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Embedded AI That’s Not Experimental
AI is now a core part of the infrastructure, not just an extra project. Today, insurers are using AI directly in underwriting, claims, and service to work more efficiently and make better decisions.
NLP and LLM AI are now essential for risk analysis, automation, and decision support. These are no longer nice-to-have features.
Examples to keep include claims triage automation, underwriting data extraction, fraud detection models, and AI assistants for agents. These systems matter because AI focused on results can improve loss and expense ratios and enhance the customer experience.
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Clean, Unified, and Usable Data Infrastructure
For most insurers, the main challenge is not the technology itself, but the data. Modern tech stacks use data lakes or warehouses, real-time data pipelines, and clean, organized datasets for AI.
AI does not work well without strong data foundations. Good data engineering enables personalization, accurate pricing, and better decision-making across the business.
These systems are essential because every gain in AI, personalization, and automation in 2026 depends on high-quality data.
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APIs and Ecosystem Connectivity
Insurance has become an open system. APIs now power embedded insurance, broker and partner connections, and third-party data enrichment.
APIs give access to once-isolated systems, making it easier for the insurance industry to work together. These systems matter because growth now depends on distribution, data, and partnerships, not just products.
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Automation and Straight-Through Processing (STP)
Automation is one of the clearest ways to improve ROI. Claims automation reduces handling costs, and most expect straight-through processing to dominate policy handling.
From the initial notice of loss to policy issuance, automation makes every step smoother. These systems are needed because efficiency is now key to protecting profit margins.
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Cybersecurity and Compliance Infrastructure
As systems get more modern, risks also grow. Insurance companies handle sensitive financial and health data, so security and compliance must come first.
Insurance companies need to adopt zero-trust architectures, strong identity and access controls, and systems that are audit-ready. Trust is at the heart of the business, and a single breach can destroy it.
What Must Go or be Drastically Reduced
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Legacy Monolithic Systems As the Core
Legacy systems will not disappear overnight, but they should no longer be at the center of operations. These systems slow down product development, create data silos and inefficiencies, and block the use of AI and real-time features.
You can swap them out for API-wrapped core systems, gradual modernization, and microservices layers. The aim is not to replace everything at once, but to lower risk and separate systems step by step.
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Siloed Point Solutions
When building tech stacks, insurers often think they need a tool for every task. This process leads to disconnected systems that cannot talk to each other.
Siloed setups lead to duplicate work, errors, and poor visibility into data. To avoid these issues, insurance companies should remove extra tools, platforms that do not connect, and one-off vendor solutions.
Instead, they should use unified platforms, coordinated workflows, and designs that focus on integration.
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‘Pilot Purgatory’ AI Projects
If your AI project is still in the pilot stage, you are already behind. The industry is shifting from testing to using AI at scale, with clear results as the goal.
In this situation, remove proof-of-concept AI projects with no deployment plan and innovation labs not tied to daily operations. Instead, use AI that is built into workflows and focused on key performance indicators.
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Hardware-Heavy, On-Prem Infrastructure
Insurance IT budgets are shifting toward software and cloud solutions instead of hardware. Companies should remove on-premises data centers when possible and avoid hardware-focused investments.
Replace them with scalable cloud infrastructure and pay-as-you-go computing models.
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Manual, Paper-Driven Processes
Manual, paper-based processes are still common, even if people do not always admit it. Today, almost half of policies will be bought digitally as automation lowers operational costs.
Insurance companies should eliminate manual underwriting, paper-heavy workflows, and claims processing handled solely by people. Replace these old processes with digital-first experiences, AI-supported workflows, and a mix of human and machine decision-making.
The Real Shift is From ‘Systems’ to ‘Intelligence’
Insurance is now about adding intelligence across the business, not just updating systems. The companies that succeed in 2026 are the ones with the cleanest, most connected, and most results-focused technology stacks.
Insurers are becoming technology-driven, so make the decision simple:
Keep:
- Cloud-native, flexible architecture
- Embedded AI
- Strong data foundations
- APIs and automation
- Security and compliance
Remove:
- Legacy cores as bottlenecks
- Siloed tools
- Experimental AI
- Hardware-heavy systems
- Manual processes
In 2026, the goal is to have technology that works together and delivers real results. The insurance industry now needs to move quickly and embrace new ideas.
Agility Holdings Group (AHG) is helping drive this change by investing in InsurTech, HealthTech, and other companies that improve access, patient care, and results. Connect with us on LinkedIn to see how AHG can help your organization innovate, reach your goals, and stay ahead in the changing insurance market.
Contact us today to get started.