Scout InsurTech Spotlight with Jeff Haner

Jeff Haner is the Founder of Coretech Insight, an independent advisory firm that primarily serves Property & Casualty (P&C) core technology (coretech) and InsurTech solution providers. Jeff was interviewed by Michael Fiedel, Co-Founder at Scout InsurTech and Co-Founder at PolicyFly, Inc.

What is the role of core systems in enabling better collaboration and integration across the insurance ecosystem?

“I like to think of core systems as ecosystems in their own right, and for better or worse, they’re central to insurers’ business transformation strategies. Many of today’s core system market leaders began a decade or two ago as single components, such as rating engines or product configurators. Over time, they grew into standalone modules, then expanded to suites with integrated modules for policy, billing, and claims, and then added digital experience, data, and analytics.

Now, in their current form, these “core, data, digital” platforms have cultivated ecosystems with dozens, sometimes hundreds of third parties. It is common for these third-party solutions to be pre-integrated and accessible through an app store or marketplace. Many InsurTechs fit into these third-party roles, offering specialized capabilities within the broader ecosystem.

From an insurer’s perspective, the path of least resistance to business transformation is usually to engage with a vendor whose core platform offers the foundational capabilities they need, plus an ecosystem for easier access to new, specialized capabilities and emerging technologies. If you’re an InsurTech and you want to be in the path of business transformation, it’s important to be part of those ecosystems.”

What should InsurTech vendors understand about timing and strategy when approaching carriers that are in the middle of core system transitions?

“Core system transitions are massive undertakings, often once-in-a-career events for the leaders involved. They’re time-consuming, expensive, and carry significant career risk. A surprising number fail to meet their objectives, and I’ve met plenty of insurers who are on their second, third, or even fourth attempt.

When a carrier is in the middle of one of these transitions, it’s important for InsurTechs to understand that the carrier may go dark for long stretches of time. That’s not a sign of disinterest; it’s simply the reality of being in the middle of what’s often compared to “open-heart surgery” for the organization. The carrier’s ability to engage is extremely limited, but they are still thinking ahead. There’s always a “what’s next?” phase once they’re past the most intense period.

For InsurTechs, that means staying visible in a helpful way, continuing to share relevant updates or insights, and being available and quick to reengage when the carrier is able to talk again. Also, urgent needs often arise while these long transitions are underway. For example, a carrier that still has two or three years before they finish transitioning to a new policy system might discover they need to launch a new product next quarter. If you’re an InsurTech that is responsive and agile, able to co-exist with a mix of old and new systems, and able to step in quickly to address the need, you’ll find opportunities even in the midst of these transitions.

InsurTechs that are a part of coretech ecosystems benefit from a broader view spanning multiple carriers and MGAs. I like to think of the insurers in these ecosystems as being on an assembly line, with some going dark as they’re entering or going through core transitions, and others reemerging into the “What’s next?” phase when they’re able to explore new opportunities. Having this broader view across an ecosystem enables InsurTechs to more easily identify opportunities to engage with insurers.”

How is artificial intelligence influencing decisions around core systems, and what risks do insurers face if foundational capabilities are not in place?

“AI is a part of almost every technology conversation right now, and it’s creating confusion. For insurance decision makers, it seems that every vendor is an AI vendor. There’s a lot of “AI washing,” similar to the “cloud washing” we’ve heard in the past. It’s very difficult to know what is real.

For some insurers, the hype around AI has become a distraction. We’ve seen a decline in public announcements of new core system deals for three years running, hitting a low for the last decade in 2024 – even lower than 2020. AI isn’t the only reason, or even a primary reason for this decline, but I think it is a factor. Insurance leaders are wondering about the impact of AI on their long-term plans. If AI is all it’s made out to be, and it can do anything and everything better, faster, and cheaper, will they even need core systems as we have known them? Will they even need their employees? That uncertainty slows the decision-making around large, enterprise-wide transformations.

For vendors, on the negative side, I’ve seen some core system providers shift their focus so heavily toward adding and marketing AI that they’re neglecting to address gaps that remain in their fundamental core capabilities. On the positive side, we also see how core system vendors with strong ecosystems are in a better position to manage the adoption of AI. These vendors can both work with AI themselves and lean on their ecosystem partners to provide AI capabilities, so they can give their customers more options without neglecting their core or blowing up their product roadmaps.

Lastly, core systems have a key role in the adoption of AI, and increasingly agentic AI, that doesn’t get talked about enough. These core systems of record embody how insurance business operations should be conducted. They house defined and authorized processes, requirements, rules, roles, safeguards, and audit trails. Unrestricted, AI can be incredibly destructive, even dangerous, and lead to compliance failures, operational breakdowns, and harm to policyholders. Core systems serve as essential guardians and AI enablers that help provide the foundation and guardrails insurers need to safely deploy, manage, and scale their use of AI.”

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