Prior to 2020, the substantial payouts and falling revenues triggered by the COVID-19 pandemic would have been impossible to forecast. And in the wake of this financial fallout, one area that has grown exponentially is technology.
Fast forward to 2025’s digital-first frontier, we could now consider every company to be a technology company. Therefore, the general expectation is that insurers in leading markets will continue to increase their spend in technology, battling against rival firms to provide the most innovative, accessible service.
Historically considered purely a “cost center”, technology has truly taken priority as industries are disrupted through the adoption of the latest technology trends, such as the Internet of Things (IoT) and the endless possibilities of artificial intelligence (AI), both of which are now attributed to revenue generation.
The impact of new technology on insurance firms
The insurance industry’s global spend on technology and IT services continues climbing. Forrester predicts an 8% increase in insurance tech spending in 2025, and Capgemini predicts this will continue at an 8.1% CAGR through to 2027, driven by IT services and software growth.
But even so, most insurance firms simply don’t have tech innovation embedded in their DNA. As you know, insurance is an age-old industry. That leaves a sizable gap between the disruptive tech-led startups (or insurtechs) that have quickly launched highly customer-centric products that eat market share, and the traditional insurance players that are grappling at the rug which is slipping from under their feet.
Still skeptical? Well, the global insurtech market is experiencing explosive growth, estimated at $22.1 billion in 2023 and forecasted to soar to $306.5 billion by 2030 – a stunning 45.6% CAGR. This reflects surging demand for digital-first insurance solutions and rapid expansion of insurtech startups.
How can you compete? By investing in an expert Chief Technology Officer (CTO).
What can a CTO do for an insurance company?
Overseeing all technological needs, as well as research and development, a strong CTO essentially keeps you in the same league as, or even in partnership with, the disruptive players.
Bringing their invaluable insight to areas such as digital strategy, user experience (UX,) cyber security, data analytics and SaaS/Cloud services, CTOs can sharpen and maintain your competitive edge.
For example, mobile and IoT technologies are now core to insurance customer experience. By the end of 2024, roughly 60% of insurance transactions are expected to occur via mobile devices as policyholders increasingly favor digital self-service. In fact, over 80% of insurance customers say they would switch carriers if the digital interface isn’t user-friendly. This underscores two things: how critical seamless mobile and online experiences have become to industry transformation, and how indispensable CTOs are becoming in driving and sustaining that transformation.
As well as streamlining service and UX, a CTO is well-equipped to identify new opportunities for data collection and fraud detection, leading to better risk management and mitigation. With vast amounts of data now available through emerging sources, they can also lead the charge in harnessing it effectively. This often includes building out data science teams to enhance client insights through machine learning (ML) and AI, enabling more accurate predictive analytics and smarter decision-making
This growing focus on data has also led to the emergence of new executive roles across insurance organizations, most notably the Chief Data Officer and Chief Data Scientist. These work in close collaboration with the CTO, bringing sharper focus to data strategy, governance and advanced analytics. Together, they reflect the deepening alignment between technology leadership and business growth in today’s insurance landscape.
The importance of partnering with insurtechs
As technology continues to reshape the insurance landscape, forward-thinking CTOs are expanding their focus. They’re not just modernising core infrastructure anymore, but actively forging strategic partnerships with innovative insurtechs.
This is reflected in the fact that a vast majority of US insurance carriers are now engaging with insurtechs, with 90%+ of insurers believing that partnering with insurtech firms is critical to their success. And insurance companies aren’t just spectating; they’re actively investing in and partnering with startups. 2024 saw an all-time high of 150 insurtech deals that involved (re)insurers as investors or partners.
Such collaborations offer a fast-track route to capabilities that would take years to build in-house, from AI-powered underwriting tools to next-gen customer engagement platforms. Rather than viewing startups as a threat, smart incumbents are harnessing their agility to accelerate transformation, improve time to market and unlock new revenue streams.
It’s the CTO who plays a pivotal role in identifying and integrating these partnerships, ensuring that any tech collaboration aligns with long-term strategy and delivers measurable value. In an environment where adaptability equals survival, forging the right alliances can mean the difference between catching up and pulling ahead.
Final thoughts
Having a CTO on board communicates viability and growth both internally and externally. They can identify, suggest and manage revolutionary technological advancements that will transform the way your insurance firm connects with customers, provides tailored services and operates on the whole.
Technology should be a prominent area of concern for any organization looking to stick around for the long-haul. In order to keep up, you must keep evolving.
If you’d like to discuss what a CTO can do for your insurance firm, get in touch with me and let’s schedule time for a call.
