As the Australian insurance market continues to thrive, both MGAs and insurers are keen to accelerate digitisation and maximise the potential of AI. But to do that, they must first upgrade the legacy systems holding them back.
Australia’s insurance market is thriving. The sector achieved the highest return on equity (ROE) for 10 years in 2025 and, despite economic headwinds, premiums are predicted to grow at an annual rate of 9.2% between now and 2029.
Underwriting agencies (UAs) continue to increase their influence, with more than 300 now in business across the country as a wave of talented underwriters set up on their own. Meanwhile, the insurer side of the market is expanding and diversifying, with around 30 different insurers now offering home, contents, and motor insurance.
Yet, thriving also means competitive, and Australian firms are aware of the need to constantly innovate to keep up with customer demands and drive efficiency savings. Recent research from The Bridge International and The Australian and New Zealand Institute of Insurance and Finance found that technology ranks as one of the top three threats for senior insurance professionals.
It’s up to insurers and MGAs to ensure they’re ready to rise to the technology challenge in the months and years ahead.
Technology aspirations
Australian insurance leaders have a strong drive to digitise and automate their operations, with research showing two-thirds (68%) are prioritising technology-driven efficiency and 59% see digital and AI-enabled customer engagement as a significant driver of business growth.
On his recent trip to Australia, Insly’s Robin-Luc Oppenheim, Director of Insurance Innovation, found that tech is widely seen as the route to competitive advantage amongst insurers and UAs:
“The smart and growth-minded operators are thinking about how they can continue gaining an advantage over competitors by speeding up their underwriting and quoting processes, taking advantage of AI, delivering a more seamless customer journey, and streamlining distribution,” he explains.
There are now numerous examples of larger insurance firms pushing the boundaries with technology. For example, at the end of last year, Allianz launched its first integrated agentic AI solution, ‘Project Nemo’ in Australia, which is achieving 80% reduction in claim processing and settlement time. Suncorp has also been very public about its AI investments to transform customer service and claims processes. Plus, the thriving insurtech sector has been quick to offer a range of highly innovative solutions to solve insurance bottlenecks.
The innovation gap
Yet, while innovation is underway in many areas, a high number of Australian insurance providers still rely on legacy technology and processes, which means they risk falling behind. As EY pointed out in its recent Insurance Innovation Intelligence report: “Capitalising on the promises of cloud and AI is proving elusive for many insurers, resulting in an ever-widening gulf between those succeeding at digital transformation and those just keeping the lights on.”
One of the big challenges Australian insurers and UAs face is integrating the entire insurance lifecycle into one core system that reflects their workflows and data needs. With many still relying on separate systems for different areas of the business, or trying to fit their processes into generic software, this is impacting efficiency, customer experience, and data visibility.
The lack of integration is also holding companies back from maximising new automation and AI tools and tapping into emerging distribution channels, driven by the rise of embedded insurance. With disparate legacy systems, UAs and insurers are losing control of their sales channels, so they lack the insight into where to invest to drive growth.
“In the Australian market, quote journeys are getting more and more complicated, and many businesses simply aren’t able to see where customers are dropping off, or which channels are working most effectively,” comments Jody Brooks, Managing Director, Socrates Systems. “So they don’t know what to change to make it better.”
Making the change
The key for these insurance firms is to invest in insurance software that matches the needs of the business and its customers, avoiding retrofitting generic or non-specific software or bolting together numerous systems. That means working with a partner that knows the insurance market, with end-to-end software designed around their processes and workflows.
With modular and customisable insurance software like Insly and Socrates Systems, insurers and UAs can upgrade their systems incrementally, as budgets and business capacity allow. This approach is also possible with AI layers, such as Insly’s NORA, which functions as a set of specialised skills or capabilities from which companies can mix and match to meet the exact needs and workflows of their business – then build from there.
A bright and innovative future
The Australian insurance market is a bright spot on the global insurance landscape, and with the right software, insurers and UAs are in a fantastic position to drive forward business transformation that will deliver even greater growth and innovation.
With a modern, integrated, and customised system, they can implement AI tools, launch new and innovative products, optimise their distribution channels, and enable their people to do more with less. They know what they need to do; it’s time to make it happen.
