Every claims director eventually faces the same dilemma.
Your claims system is struggling. Handlers are frustrated. Processes that should be straightforward take hours. The question everyone's asking: should we replace the whole thing?
But recent research across UK specialty insurance reveals something interesting. 'Should we replace our system?' is often the wrong question.
Better to ask: what problem are we actually trying to solve?
The Clyde & Co MGA Opinion Report 2025 found 77% of Managing General Agents believe claims processes require fundamental improvement - up dramatically from 59% just two years earlier.
Our survey of 250 claims professionals reveals most frustrations don't stem from system failure. They stem from workflow friction.
Understanding the distinction matters because the solution paths - and their costs, risks, and timelines - differ dramatically.
So the question becomes: which intervention makes sense for your situation?
Three scenarios: diagnosing what's actually broken
Scenario one: core system failure
Some problems genuinely require replacement. When your core claims management system exhibits fundamental failures, no amount of process improvement will help.
True core failures look like:
- System instability that disrupts operations. Not occasional slowness, but regular crashes, data corruption, or complete unavailability that prevents claims handling entirely.
- Data integrity problems that create business risk. When information disappears, duplicates unpredictably, or becomes unreliable enough that handlers trust their memory over the system.
- Performance degradation that prevents scaling. The system functioned adequately at lower volumes but cannot handle current claim counts without unacceptable delays.
- Unsupported technology creating compliance exposure. Legacy platforms where the vendor no longer provides updates, security patches have ceased, or regulatory requirements exceed system capabilities.
As one Head of Claims explained during our research:
There's no failsafe. If someone enters £200,000 instead of £20,000, no one knows until later.
When validation breaks at this fundamental level, you’re dealing with architecture failure, not workflow friction.
The replacement path involves…
…substantial direct investment in new software licensing and implementation services.
But direct costs often represent only a portion of total expenditure – commonly 30-40% based on industry experience. Data migration, change management, training programmes, and productivity disruption during transition add significantly to both cost and timeline.
Most critically, replacement introduces existential risk. During implementation, you’re running parallel systems or managing cutover – periods when claim handling capacity is compromised and error risk increases.
When core systems truly fail, replacement becomes unavoidable. But it’s the highest-cost, highest-risk path. Make sure you’re solving a genuine system failure rather than misdiagnosing workflow problems.
Revolutionise your claims operations with futureClaims™
futureClaims™ is an advanced platform designed to meet the demanding requirements of complex commercial and specialty claims, including the London Market.
Scenario two: workflow friction
Most organisations actually sit somewhere different: systems that technically function but frustrate everyone using them.
Our research found 30% of claims professionals cite collaboration and communication challenges as their primary obstacle to meeting strategic goals. Another 26% identified training burden due to complex systems as a significant obstacle, rising to 33% among Third-Party Administrators.
Workflow friction manifests as:
- time disappearing into administrative tasks rather than expert assessment. As one marine claims director told us: ‘We’re doing six steps just to process one payment. It could be three.’
- information fragmentation forcing manual work. One handler explained: ‘Everything you do has to be manually re-entered… I don’t trust the system.’ When data exists across disconnected platforms – claim notifications, core management systems, document repositories, financial systems, external communications – handlers spend expertise on data housekeeping.
- priority blindness creating service level risk. Systems that sort alphabetically or by date received provide no intelligence about which claims genuinely require urgent attention. ‘You can’t tell which claims are actually sensitive just from the list’, explained one TPA claims handler.
- decision complexity without structured support. ‘It’s hard to quantify D&O claims. I wish we had a reserving tool’, admitted one experienced handler. Not automation – just structured frameworks for genuinely complex judgement.
This is where augmentation delivers clear and meaningful value.
Augmentation layers sit alongside existing systems, addressing specific friction points without requiring core replacement. They bring together data aggregation that creates unified views across fragmented sources, decision support that draws on historical precedent and structured frameworks, and integration middleware that enables seamless coordination between platforms that will never be replaced.
Organisations like Hiscox are pursuing exactly this approach – integrating data from multiple sources into unified views whilst preserving existing system investments. One implementation reduced information search time from 5-10 minutes to seconds by aggregating rather than replacing.
The augmentation advantage lies in dramatically lower cost, faster deployment, reduced risk and clear, incremental value demonstration. It lets you address today’s friction while steadily building the foundations for tomorrow’s capabilities.
Scenario three: business model evolution
Sometimes the problem isn’t your system or your workflows – it’s strategic misalignment.
Signs your business has outgrown its technology architecture:
- A merger or acquisition can leave you with incompatible platforms, as two organisations try to operate on systems built for different business models, geographies or specialty lines.
- Portfolio expansion then adds another layer of pressure, especially when you move into areas like cyber risk on a platform originally designed for traditional property casualty, or when delegated authority arrangements introduce capacity-provider oversight your system was never meant to handle.
- On top of that, a shift in market positioning may demand entirely new operational models, such as moving from individual claim administration to orchestrating an ecosystem of multiple parties.
As one interview participant explained: ‘Response time is a real strength’. But that competitive advantage depends on architectural capabilities supporting rapid coordination – capabilities many legacy platforms never envisioned.
When business model evolves beyond architecture, no amount of fixing or augmenting solves fundamental strategic misalignment.
This scenario demands architecture-first thinking.
Before investing in any technology path, define the business model you’re building toward. What markets, what partnerships, what operational models? Then evaluate whether current architecture can evolve to support that strategy – or whether strategic objectives require different foundations.
The most expensive mistake: implementing new technology that solves today’s problems but cannot support tomorrow’s business model.
The decision framework: from diagnosis to action
Making intelligent technology decisions requires systematic evaluation, not intuition.
Step one: diagnose what's actually broken
Begin with a claims friction audit – a comprehensive assessment revealing where operational costs actually accumulate.
- Time and motion analysis across representative handlers:
Document the hours spent searching for information versus conducting complex assessment, track system transitions and handoffs, measure interruptions and context-switching, and quantify the rework that arises when data quality falls short.
Our research consistently found handlers spending more time on administrative friction than expert judgement – not because systems fail entirely, but because workflows accumulate dozens of small inefficiencies.
- Error and quality cost tracking:
Analyse the claims that require correction, from data entry mistakes and incomplete information that triggers follow-up, to miscommunications that need clarification and service level breaches that demand recovery.
These costs rarely appear on operational dashboards but compound significantly across volume.
- Stakeholder satisfaction assessment:
Survey broker confidence in communication and responsiveness, assess capacity provider trust in governance and transparency, measure handler satisfaction with tools and processes, and gather policyholder feedback on their claims experience.
Relationship friction often signals workflow problems rather than system failures.
- Pattern identification:
Are frustrations system-wide or concentrated in specific areas? Do problems intensify at volume peaks or remain constant? Are issues technical (crashes, errors) or operational (delays, manual work)?
As one claims operations director observed:
Smart technology could handle routine tasks much faster... freeing us to focus on what requires real expertise.
This signals workflow friction, not system failure, as the primary challenge.
Step two: calculate the true cost of each path
Technology decisions require understanding three cost categories: direct, hidden, and risk.
Direct costs appear in budgets: software licensing, implementation services, hardware infrastructure, training programmes, consulting support.
But hidden costs often exceed direct expenditure: productivity disruption during implementation, learning curve impacts on claim handling capacity, relationship strain from service disruption, opportunity cost from delayed other initiatives.
Risk costs are hardest to quantify but potentially most significant: implementation failure requiring restart, data migration errors affecting claim accuracy, regulatory exposure during transition periods, competitive disadvantage from operational disruption.
Compare realistic total costs across paths:
Full replacement typically involves lengthy implementations – industry experience suggests 18-24 months is common for specialty insurance platforms, often with substantial disruption. Even successful deployments frequently fall short of initial expectations, with research suggesting 60-70% benefit realisation is typical whilst creating unexpected friction elsewhere.
Targeted augmentation enables faster deployment, with modules often implemented in months rather than years to address specific pain points. It delivers lower risk, faster value and steady, incremental learning.
Importantly, ‘do nothing’ carries costs too: continued productivity waste from operational friction, staff turnover from system frustration, regulatory exposure under FCA Consumer Duty requirements, competitive disadvantage as others improve.
The 77% of MGAs recognising fundamental improvement needs represent both competitive threat and opportunity. Those who systematically address friction gain decisive advantages in handler productivity, broker relationships, and capacity provider confidence.
Step three: match solution to problem
With diagnosis complete and costs understood, align the intervention to the actual problem.
- When you’re seeing core system failure – crashes, data loss, unsupported technology and fundamental incapacity – fixing or replacing the platform becomes the only viable route, with disruption cost, an 18–24-month timeline for most specialty platforms and the operational risk of transition all factored in.
- When integration gaps create problems – data becoming fragmented, teams re-entering the same information and handlers spending too long searching for what they need – augmentation layers offer a quicker route forward, combining data aggregation, API connectivity and deployments measured in months.
- When decision support is lacking – outcomes drifting, frameworks varying from person to person and specialists becoming bottlenecks – augmentation adds decision intelligence, historical precedent and expert reinforcement without touching the core.
- When priority management fails – urgent claims going unnoticed, teams slipping into reactive firefighting and SLAs repeatedly falling behind – targeted modules such as intelligent triage, risk scoring and proactive escalation help restore control and predictability.
- When ecosystem coordination struggles – parties working at cross-purposes, ownership becoming unclear and status updates losing visibility – collaboration platforms, visibility layers and workflow orchestration help re-establish clarity and flow.
- When UX and training become burdens – onboarding taking longer than it should, handlers growing frustrated and attrition rising as a result – interface redesign, intuitive workflows and simplified interactions can be layered on without large-scale rebuild.
- When strategic misalignment emerges – the business model no longer fits, M&A introduces incompatibility and new markets place demands the system cannot support – the right first step is an architecture review, followed by a technology direction grounded in strategic clarity.
The framework provides repeatable governance for technology decisions -preventing reactive responses whilst enabling systematic evaluation.
The augmentation alternative: why it's gaining momentum
Across UK specialty insurance, augmentation is becoming the preferred transformation approach – and the reasons are compelling.
- Modular deployment reduces risk whilst accelerating value:
Rather than pursuing comprehensive implementations that attempt to solve everything at once, organisations introduce targeted capabilities that address specific friction points, whether that’s streamlining payment processing, improving information aggregation, adding priority intelligence or embedding clear decision support frameworks.
Each module delivers measurable improvement within weeks or months, creating the confidence to move on to the next, while any missteps remain contained rather than catastrophic.
- Augmentation preserves rather than disrupts:
Core systems that function adequately, even if they are frustrating to use, stay in place. There’s no data migration that could expose claims information to corruption or loss, no parallel-system period that stretches operational capacity and no big-bang cutover that introduces existential risk.
This is especially important in specialty claims, where complex portfolios and long-tail development make any disruption far more hazardous.
- Modular architecture enables future flexibility:
When business requirements evolve – new markets, partnership models, regulatory demands – modular layers adapt far more easily than monolithic platforms. You can add capabilities as they become necessary, replace individual modules without disturbing the rest and shape an architecture that grows with your strategy instead of holding it back.
- Research shows growing preference for connected ecosystems:
Our findings revealed consistent desire for solutions enhancing existing platforms rather than requiring replacement. As one participant explained, systems are often ‘80% out-of-the-box, 20% configuration’. The goal isn’t replacing that foundation, but addressing the gaps preventing effective use.
This aligns with broader industry patterns toward API-driven integration, microservices architectures, and cloud-native deployment. The future? Orchestrated ecosystems where specialised components collaborate seamlessly.
Streamlining the claims underwriting process with an MVP integrating disparate data sources into a single system
Our MVP will enhance data accessibility, improve user experience and operational efficiency for claims underwriters, enabling future AI-driven developments, including data synthesis and process automation.
Real-world augmentation: addressing specialty claims friction
Consider a specialty insurer handling complex commercial lines – professional indemnity, directors and officers, marine, and casualty. Core system functioned adequately but operational friction was substantial.
The friction pattern:
Claims handlers routinely spent 5–10 minutes locating the information they needed, from policy documents and prior communications to related claims and broker correspondence. When case references were missing, that search could stretch to hours or even push resolution into the next day.
Payment processing involved six manual steps across three systems, reserve decisions were made without a structured framework- leading to variation between handlers- and priority setting relied more on institutional memory than on systematic intelligence.
None of this pointed to system failure: the core platform still processed transactions, stored data and produced reports. The issue was workflow friction, which drained expert capacity on administrative tasks instead of supporting complex assessment.
The augmentation approach:
Rather than replacing the core system – with its substantial cost, long implementation window and considerable risk – the organisation introduced a set of targeted augmentation layers.
Data aggregation created a unified view for handlers across policy administration, claims management, document repositories and communication platforms, cutting information-search time from 5–10 minutes to seconds.
Event-driven workflow automation removed unnecessary manual steps in payment processing, reducing six steps to two while maintaining appropriate control.
Intelligent prioritisation highlighted claims that needed urgent attention based on financial exposure, complexity indicators and SLA risk, allowing teams to manage proactively rather than reactively.
Decision support frameworks added structured guidance for reserve decisions, reducing variation between handlers while still leaving room for expert judgement in genuinely complex cases.
The results:
Implementation took place in phases over several months rather than through a multi-year deployment, and each module delivered a clear, measurable improvement.
Information search time fell from 5–10 minutes to seconds, payment processing dropped from six steps to two, and handlers were able to redirect a meaningful share of their time from administrative tasks to complex assessment. Service level breach rates declined, and handler satisfaction rose noticeably.
Crucially, the core system stayed operational throughout. There was no data migration, no cutover risk and no threat to business continuity.
The overall investment remained well below the cost of full replacement, the risk profile was dramatically lower, and the timeline was measured in months rather than years. It’s a clear illustration of augmentation’s appeal: resolving real friction without introducing implementation friction along the way.
Read more about insurance claims on our blog:
The investment decision: choosing your path
With framework established and augmentation case understood, how should claims leadership actually decide?
When to replace
Full system replacement becomes the appropriate path when:
- Core technology creates fundamental business risk through instability, data integrity failures, or unsupported architecture facing regulatory exposure.
- Performance limitations prevent volume scaling despite optimisation attempts.
- Technology obsolescence makes vendor support unavailable and security maintenance impossible.
Expect lengthy implementations – industry experience suggests 18-24 months or longer for specialty platforms – involving comprehensive requirements definition, vendor selection, data migration planning, parallel system operation, extensive testing, phased rollout, and stabilisation period.
Total investment typically runs substantially beyond initial software costs once implementation services, data migration, change management, training, and disruption costs are included.
Critical success factors: executive commitment beyond initial enthusiasm, realistic timeline expectations, comprehensive change management, willingness to accept that successful implementations typically deliver 60-70% of initial expectations.
When to augment
Augmentation delivers optimal results when:
- Core systems function adequately but workflow friction wastes capacity.
- Integration gaps create manual work and information fragmentation.
- Decision support deficiencies lead to inconsistent outcomes.
- Ecosystem coordination challenges slow multi-party claims.
- Priority management lacks intelligence creating reactive firefighting.
Expect faster deployment – augmentation modules can often be implemented in months rather than years, with each addressing specific friction point and delivering measurable improvement before next capability deployment.
Investment profile substantially below full replacement, with modular expenditure enabling staged commitment based on demonstrated value.
Critical success factors: clear friction diagnosis identifying highest-impact targets, realistic module scoping avoiding feature creep, disciplined deployment completing one capability before starting next.
When to do nothing (and why it's rarely sustainable)
‘Do nothing’ sometimes appears as lowest-cost option. No budget required. No implementation risk. No change disruption.
But inaction carries costs often invisible to operational dashboards:
- Competitive erosion: as the 77% of MGAs recognising improvement needs take action, those maintaining status quo fall behind in handler productivity, broker satisfaction, and capacity provider confidence.
- Operational waste compounding: small inefficiencies – minutes spent searching, steps that could be eliminated, decisions made without proper context – compound across volume into substantial capacity consumption.
- Regulatory exposure increasing: FCA Consumer Duty requirements demand demonstrable fair outcomes and comprehensive audit trails. Systems struggling to provide evidence create growing compliance risk.
- Talent attrition accelerating: in markets where specialist expertise is scarce, systems frustrating talented professionals drive them toward competitors with better tools. Our research found 26% identifying training burden as a significant obstacle – and frustrated handlers don’t stay long enough to complete extended onboarding.
The question isn’t whether inaction has costs. It’s whether those costs – competitive, operational, regulatory, and talent-related – exceed investment required for improvement.
Reframing the question: from 'replace?' to 'how intelligently can we improve?'
The replacement question – ‘Should we replace our claims system?’ – frames technology decisions as binary choices: keep what we have or start fresh.
But our research across UK specialty insurance reveals a different reality. Most claims operations don’t suffer system failure. They suffer workflow friction – dozens of small inefficiencies that compound into substantial operational costs.
The better question: ‘What specific problems are we actually trying to solve, and what’s the most intelligent path to solve them?’
That question leads to much better decisions. So, how to proceed?
- Diagnose friction systematically through comprehensive audit revealing where costs actually accumulate.
- Calculate realistic total costs – direct, hidden, and risk – across all paths including ‘do nothing’.
- Match solution to actual problem using decision frameworks aligning intervention type with friction pattern.
- Consider augmentation as a primary path when systems function but workflows frustrate, enabling modular deployment that delivers value faster with lower risk.
- Reserve replacement for genuine core failures where system architecture cannot support business requirements.
- Recognise strategic misalignment as distinct from technology problems, ensuring business model clarity precedes system decisions.
The 77% of MGAs recognising fundamental improvement needs face real decisions with significant cost, risk, and competitive implications.
But the choice isn’t just replace-or-keep. It’s understanding what’s actually broken, calculating what paths genuinely cost, and matching intervention intelligence to problem reality.
Most organisations will find their highest-value path is augmenting strategically, addressing specific friction whilst preserving working foundations.
Revolutionise your claims operations with futureClaims™
futureClaims™ is an advanced platform designed to meet the demanding requirements of complex commercial and specialty claims, including the London Market.
