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Industry Spotlights | September 23, 2025

Insurance broker challenges in the digital age

By Steve Reid, Director and Global Lead, Broking, DXC Technology

As the insurance industry undergoes rapid change, small to mid-sized brokers across the world find themselves at an inflection point. Unlike larger firms with more resources and dedicated innovation teams, smaller insurance brokers may struggle to invest sufficiently in fast-moving technology and continue to use outdated systems, manual processes and disjointed workflows. 

What makes these challenges more pressing is the marked shift in customer expectations throughout the insurance distribution chain. Today’s consumers expect digital convenience and seamless service at every touchpoint — and for insurance customers it’s no different. They demand the same ease when, for instance, comparing policies, getting quotes, or managing insurance claims.

As a result, modernizing operations and investing in insurance software applications and other digital solutions is no longer a competitive advantage — it’s a business imperative that often feels out of reach. 

There are over 400K insurance brokers across Australia, Singapore, the UK, and the US—mostly small firms earning under $10M annually or mid-sized ones making $10M–$100M.

Managing a challenging insurance market

The upside for brokers is that cost-efficient, secure and scalable software-as-a-service (SaaS) and operations platforms are available to reduce costs, streamline operations and stay compliant with regulations through convenient access to modern technologies, such as agentic AI, automation and data connectivity. 

Further, these platforms are built to grow with your organization – they run in the cloud, are API-enabled, and feature modular components that easily adapt and scale. 

To fully appreciate the value of these digital tools, it’s important to understand the challenges today’s independent brokers face as they strive to help clients manage risk across their organizations. Their key obstacles include:

  • Doing business with old technology and systems
  • Bridging the digital skills gap
  • Keeping up with shifts in customer and regulatory expectations

SaaS and operations platforms are built to grow with an organization. They run in the cloud, are API-enabled, and feature modular components that easily adapt and scale.

Legacy systems hurt the customer experience

Today’s insurance specialists are under growing pressure to deliver faster, more personalized service – yet many still rely on legacy systems that fragment workflows and slow things down. These outdated tools also make it difficult for many insurance brokers to access real-time data or automate routine tasks.

Take insurance renewal season, for example. It’s one of the insurance sector’s busiest periods of the year, where many smaller brokers continue to manually gather policy details, re-enter customer information across multiple platforms, and chase down paperwork and updates – leading to delays, inefficiencies, and an increased risk of errors. 

Legacy systems not only drain time and resources, but they can also impact the customer experience. 

By investing in digital tools, however, brokers can automate routine tasks, reduce errors and focus more on delivering high-value service that sets them apart in a competitive insurance market. 

Spending on innovation is rising. In 2025, the insurance industry is expected to spend 8% more in tech than the previous year, according to Forrester.

Digital skills gaps challenge broker-customer relationships

Many small to mid-sized insurance brokers operate with limited access to dedicated digital or IT resources, making it challenging for them to adopt and fully take advantage of modern tools. 

Without access to digital expertise, smaller brokers may not be fully aware of the potential presented by digital capabilities, such as the automated matching of customer payments to policies or the benefits of integrated, AI enabled, workflow capabilities to drive business processes.

And because brokers are often focused on serving customers first and foremost, many tasks – such as quoting, policy updates or document collection – are still handled manually. 

These challenges are understandable, but they also point to a widening disconnect between how customers prefer to engage and what many brokers are currently equipped to deliver. To narrow these gaps, it’s critical for brokers to move toward a digital-first operating model. This is possible to achieve through SaaS solutions that provide user-friendly access to advanced technologies, such as generative AI for insurance brokers or agentic AI, regardless of where brokers are in their digital transformation.  

Agentic AI systems that act autonomously on behalf of users can help brokers strengthen customer relationships through personalized service, proactive communication and streamlined workflows.

Shifting customer and regulatory expectations

Another key challenge for brokers is keeping up with customer and regulatory expectations as they continually evolve.

Clients have come to expect a high level of convenience, speed, and personalization. In an age where digital convenience is the norm, they want seamless interactions with brokers and insurance carriers, instant access to timely information, and services that are intuitive and efficient. 

While brokers try to meet these demands, they also aim to stay compliant with new regulations as industry laws and standards continue to change. Brokers must stay vigilant, dedicating time and resources to understand and implement new and evolving regulatory compliance requirements to avoid penalties and maintain trust.

In this environment in which brokers are asked to do more, strategic digital investments are no longer optional – they are essential. By modernizing operations, brokers can meet rising customer expectations with smarter, faster service. In addition, they can streamline compliance efforts, adapt quicky to regulatory change, and ultimately build a business fit for the future.

 

The big picture

Brokers are under pressure from outdated technology, a widening digital skills gap, and rising customer and regulatory demands. Yet with accessible SaaS platforms and lower upfront costs, modernization is now within reach—especially for small to mid-sized firms. 

DXC helps brokers accelerate this modernization journey, delivering the platforms, expertise and support needed to thrive in a fast-changing market.

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About the author

James Mahon is the Reinsurance Pre-Sales Lead, DXC Technology;

Steve Reid is Global Product Leader of Broking at DXC Technology. Steve supports commercial insurance brokers and MGAs with their digital transformation journeys.