Digital Engineering Reshapes Insurance Operations, Innovation

Key Terms

cloud-native technical

Cloud-native describes a way of creating and running applications that are designed specifically to operate smoothly on cloud computing platforms. Think of it as building a house with flexible, lightweight materials that can be easily moved, scaled, or adjusted as needed, rather than using rigid, traditional construction. For investors, it signifies technology that is more adaptable, efficient, and capable of quickly responding to changing market demands.

api-first technical

Designing a product or service so its programmable connection points (APIs) are created and prioritized before any user-facing features, like planning plumbing and wiring before decorating rooms. For investors, an API-first approach signals easier integration with partners and customers, faster rollout of new features, and more scalable, reusable technology that can lower development costs and open additional revenue or partnership channels.

devops technical

DevOps is a way of working that combines software development and IT operations to improve how technology systems are built, tested, and maintained. It emphasizes collaboration, automation, and continuous improvement to deliver updates quickly and reliably. For investors, understanding DevOps can signal a company’s ability to innovate faster and respond more effectively to market changes.

continuous integration and continuous delivery (CI/CD) technical

Continuous integration and continuous delivery (CI/CD) are automated processes that let software teams merge small code changes frequently and push them into production quickly and reliably, like an assembly line that tests and packages each part before it leaves the factory. For investors, CI/CD matters because it speeds product updates, reduces the chance of costly bugs, and helps a company respond faster to market needs—impacting growth, costs, and competitive advantage.

elastic compute technical

Elastic compute is cloud-based computing capacity that automatically grows or shrinks to match demand, so a business can use more processing power during busy times and less when traffic falls. For investors, it matters because it reduces wasted spending, supports faster product changes and scaling without large upfront hardware costs, and can improve profit margins and operational agility—similar to renting extra seats only when an event needs them.

Insurers are modernizing technology foundations to improve speed, efficiency, policyholder experience, ISG Provider Lens^® report says

STAMFORD, Conn.--(BUSINESS WIRE)-- Incumbent insurance companies are adopting digital engineering to replace legacy systems with modern platforms that enable faster product delivery and improved policyholder engagement, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a global AI-centered technology research and advisory firm.

The 2025 ISG Provider Lens^® global Insurance Services ― Strategic Capabilities (Insurance Digital Engineering Services) report finds that insurers are contending with technology foundations built over decades that incur rising maintenance costs, restrict integration of analytics and AI and slow the introduction of new products. Many carriers are investing in modernization to reverse stagnant premium growth and address declining policyholder satisfaction that may be caused by fragmented channels and outdated tools.

“Digital engineering has become essential to insurance industry transformation,” said Dennis Winkler, director, Insurance, at ISG. “Incumbent insurers need modern architectures, development methods and organizational structures to compete with digital-first challengers. Digital engineering is the core capability for succeeding in that transition.”

Insurers are upgrading core systems with cloud-native platforms that improve agility and reduce operating friction, the report says. Many are replacing older systems for policy administration and claims or refactoring components to overcome their dependence on mainframes. These upgrades allow for phased transitions that reduce operational risk while improving the speed of service delivery. Carriers that adopt modern platforms report better alignment between business and technical teams and more consistent product updates in response to market and regulatory changes.

Modernization efforts increasingly rely on API-first integration to unify data and streamline interactions across applications and channels, ISG says. Insurers are implementing API strategies that turn functions such as quoting, binding and claims filing into reusable services. These services enable seamless handoffs between digital and agent-supported touchpoints, reducing friction for policyholders and improving transaction accuracy. Integration platforms are helping carriers coordinate workflows across multiple systems without compromising data integrity.

By adopting cloud infrastructure and DevOps practices, insurers are also tightening up development cycles, the report says. Elastic compute services reduce operational overhead while providing secure environments for regulated workloads. DevOps methods, including automated testing and continuous integration and continuous delivery (CI/CD), allow teams to update software in less time and ensure consistent quality. These capabilities help insurers respond to regulatory requirements and competitive pressures without lengthy development efforts.

“Insurers that invest in strong engineering foundations improve speed, stability and customer outcomes,” said Ashish Jhajharia, lead author of the report. “Service providers play key roles in helping enterprises adopt these methods at scale.”

The report also explores other trends in digital engineering for insurance, including the increasing importance of unified data environments for analytics and the need for stronger resilience engineering across modern architectures.

For more insights into the technology-related challenges faced by insurance enterprises, plus ISG’s advice for overcoming them, see the ISG Provider Lens^® Focal Points briefing here.

The 2025 ISG Provider Lens^® global Insurance Services ― Strategic Capabilities (Insurance Digital Engineering Services) report evaluates the capabilities of 20 providers in one quadrant: Insurance Digital Engineering Services.

The report names Atos, Capgemini, Cognizant, HCLTech, Infosys, LTIMindtree, Persistent Systems and Tech Mahindra as Leaders in the quadrant.

In addition, Coforge and ValueMomentum are named as Rising Stars — companies with a “promising portfolio” and “high future potential” by ISG’s definition — in the quadrant.

In the area of customer experience, Sutherland is named the global ISG CX Star Performer for 2025 among insurance industry services providers. Sutherland earned the highest customer satisfaction scores in ISG's Voice of the Customer survey, part of the ISG Star of Excellence™ program, the premier quality recognition for the technology and business services industry.

Customized versions of the report are available from Coforge and ValueMomentum.

The 2025 ISG Provider Lens^® global Insurance Services ― Strategic Capabilities (Insurance Digital Engineering Services) report is available to subscribers or for one-time purchase on this webpage.

About ISG Provider Lens^® Research

The ISG Provider Lens^® Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across Europe, as well as in the U.S., Canada, Mexico, Brazil, the U.K., France, Benelux, Germany, Switzerland, the Nordics, Australia and Singapore/Malaysia, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage.

About ISG

ISG (Nasdaq: III) is a global AI-centered technology research and advisory firm. A trusted partner to more than 900 clients, including 75 of the world’s top 100 enterprises, ISG is a long-time leader in technology and business services that is now at the forefront of leveraging AI to help organizations achieve operational excellence and faster growth. The firm, founded in 2006, is known for its proprietary market data, in-depth knowledge of provider ecosystems, and the expertise of its 1,600 professionals worldwide working together to help clients maximize the value of their technology investments.

View source version on businesswire.com: https://www.businesswire.com/news/home/20251218440756/en/

Press Contacts:



Laura Hupprich, ISG

+1 203-517-3100

laura.hupprich@isg-one.com



Julianna Sheridan, Matter Communications for ISG

+1 978-518-4520

isg@matternow.com

Source: Information Services Group, Inc.