Why Insurer Culture, Not Technology, Is the Real Barrier to Change

For years, the narrative in the insurance industry has been dominated by one word: digital transformation. Insurers are told they must adopt artificial intelligence, leverage big data, deploy chatbots, and migrate to the cloud or risk obsolescence. While the imperative for technological advancement is undeniable, a growing chorus of leaders is pointing to a more fundamental, human-shaped obstacle. According to Manulife Canada’s CEO, Naveed Irshad, and other forward-thinking executives, it is not a lack of technology, but rather entrenched organizational culture that is the primary brake on meaningful progress.

The Technology Trap: A False Panacea

Walk the floor of any insurance conference, and you’ll be dazzled by promises of seamless automation, predictive analytics, and hyper-personalized policies. The industry is investing billions. Yet, the customer experience often remains clunky, internal processes stay siloed, and innovation can feel glacial. Why does this gap exist?

The answer lies in a common misconception: that technology is a plug-and-play solution. Companies can purchase the most sophisticated underwriting platform or customer relationship management system available, but if the people and processes surrounding it don’t evolve, the investment fails. Technology is an enabler, not a driver. It amplifies existing culture and workflows—for better or worse. A rigid, risk-averse culture will simply find new ways to use advanced tools to execute old, inefficient methods.

The Cultural Culprits Holding Insurers Back

So, what specific cultural elements are creating this inertia? Several key themes emerge:

• Risk Aversion as a Core Identity: Insurance is, by nature, in the business of managing risk. However, this has often morphed into an institutional paralysis where avoiding failure is prioritized over achieving success. This mindset stifles experimentation, discourages agile “test-and-learn” approaches, and makes the organization slow to respond to market shifts.
• Legacy Silos and Turf Protection: Many insurers are organized into rigid product-based or functional silos—life, property & casualty, investments, claims, marketing. These silos create fragmented customer experiences and internal competition for resources. Data and insights become hoarded rather than shared, directly undermining the potential of integrated technology platforms.
• Aversion to Customer-Centric Disruption: True transformation requires viewing operations through the customer’s lens, which can be disruptive to long-standing internal practices. Culture that values internal convenience over external simplicity will resist changes that streamline for the customer but complicate internal metrics or hierarchies.
• The “This Is How We’ve Always Done It” Mentality: In an industry with centuries of history, legacy processes can become deeply ingrained. Challenging these sacred cows requires leadership courage and a cultural permission slip to question established norms.

Leadership’s Pivotal Role in Cultural Reshaping

Changing a deep-seated culture is arguably the hardest task in business. It cannot be delegated to the IT department or a single innovation team. It must be led from the very top. As Naveed Irshad emphasizes, executives must move beyond being cheerleaders for new tech and become architects of a new operating model.

This involves several critical actions:

Modeling the Desired Behaviors: Leaders must visibly embrace agility, collaboration, and calculated risk-taking. They need to celebrate intelligent failures as learning opportunities and break down silos through their own collaborative actions.
Empowering Employees at All Levels: Front-line employees often have the clearest view of customer pain points and process inefficiencies. A transformative culture empowers these employees to suggest and implement solutions, flattening hierarchies and accelerating change.
Aligning Incentives and Metrics: Culture is reinforced by what is measured and rewarded. If bonuses are tied solely to maintaining loss ratios in a silo, cross-functional collaboration won’t happen. Incentive structures must be redesigned to promote customer-centric outcomes, data sharing, and innovation.

Technology as the Cultural Catalyst

This is not to say technology is unimportant. When implemented with a supportive culture, it becomes a powerful catalyst for sustaining change. The right technology can:

• Break Down Silos: Integrated data platforms force different departments to work from a single source of truth, fostering collaboration.
• Automate the Routine: Freeing employees from manual, repetitive tasks allows them to focus on higher-value, empathetic customer interactions and complex problem-solving.
• Provide Data-Driven Insights: Objective data can help overcome subjective biases and “gut feeling” decisions, supporting a more evidence-based and agile culture.
• Enhance Customer Experience: Smooth digital interfaces and faster claims processing visibly demonstrate the benefits of change, building internal momentum for further transformation.

The relationship is symbiotic. A progressive culture selects and implements technology more effectively, and that technology, in turn, reinforces and enables the new cultural norms.

The Path Forward: Integrating Mindset and Machine

The insurance industry stands at a crossroads. The pressure from insurtechs, changing customer expectations, and economic volatility is immense. The winning insurers of the future will be those who understand that transformation is a human-centric challenge with a technological component, not the other way around.

The journey begins with honest introspection. Leadership teams must ask themselves tough questions: Are we truly customer-obsessed, or just customer-aware? Do we reward preservation or innovation? Do our structures enable collaboration or conflict?

The conclusion is clear: Investing in the latest software without investing in cultural evolution is a futile exercise. It’s like installing a Formula One engine in a horse-drawn carriage—the potential is there, but the structure can’t handle it. By courageously addressing the cultural foundations—the mindsets, behaviors, and organizational structures—insurers can finally unlock the transformative power of their technological investments and build organizations that are not only digitally proficient but also resilient, agile, and genuinely customer-focused for the long term. The race will be won not by those with the most advanced tools, but by those with the most adaptive and collaborative cultures.