76% of London Market Firms Expect Their Core Systems Will Need to Change to Support AI, Federato Research Finds

Survey of 245 London Market professionals finds most firms expect significant changes to the core systems behind AI and underwriting

Key takeaways

• 76% expect their core systems will need significant integration, modernisation or transformation to support future AI and underwriting requirements.
• 89% say operational speed cost their organisation business to a competitor in the past 12 months.
• 42% say underwriting strategy changes take weeks or longer to reach the desk, and every firm that takes a month or longer lost business on speed.
• 71% of organisations running AI in business-critical workflows still lost business on speed, and 54% struggle to connect their core with broker, bureau or settlement processes.

LONDON--(BUSINESS WIRE)--76% of London Market organisations expect their core systems will need significant integration, modernisation or transformation to support future AI and underwriting requirements, according to new research from Federato. 89% say operational speed cost their organisation business to a competitor in the past 12 months.

The London Insurance Market's Execution Gap: AI Ambition and Core Technology surveyed 245 professionals at Lloyd's managing agents, company market insurers, managing general agents (MGAs), reinsurers and brokers. 58% of respondents say their organisation already uses AI in production.

Only 24% of respondents believe incremental upgrades to their existing core will meet future needs

The most frequently cited barriers to modernisation reflect how the London Market operates, led by subscription and multi-party underwriting (43%) and multiple systems across the policy lifecycle (42%). 38% report difficulty connecting their core with broker, bureau or settlement processes. Organisations that have lost business because of operational speed are 2.4 times as likely as those that have not to make a unified platform or policy administration system (PAS) modernisation their top technology investment over the next three years (50% versus 21%).

89% report lost business due to operational speed

42% of respondents say changes to underwriting strategy take weeks or longer to reach day-to-day underwriting decisions. Reported losses are more widespread where implementation takes longer, rising from 59% of organisations that implement changes immediately to all of those that take a month or longer.

All the while, faster quotes and broker responsiveness are the most frequently cited priorities for AI and core modernisation (36%), ahead of improving underwriting margins (26%) and scaling premium without proportional headcount growth (25%)

“The research reveals a clear consensus: legacy core systems are too slow, and bolt-on AI can’t deliver what it promised," said Will Ross, CEO and Co-founder of Federato. “We expect common sense to prevail: executives will realize there’s no point in wasting more time and money trying to make legacy systems work, and they’ll do what’s necessary.”

Download the full report at https://www.federato.ai/resources/london-market-execution-gap-report

Will Ross will present the findings at Insurance Insider's London Market Conference and at InsTech's The cost of standing still: what the London market wants from Technology.

About Federato

Federato is the only AI-native core system that spans the full policy lifecycle and changes the way insurance work gets done. It replaces legacy policy administration systems with AI capabilities built into insurers' workflows, not bolted on. Its proven agentic AI conducts complex analyses with depth and rigor, freeing up insurers' human capital to focus on nuanced decisions and relationships. Federato is the independent alternative to legacy systems that enables better business outcomes.

Learn more at federato.ai.

Frequently asked questions

What did Federato's London Market research find?
76% of 245 London Market professionals expect their core systems will need significant integration, modernisation or transformation to support AI, and 89% say operational speed cost their organisation business in the past 12 months. 58% already use AI in production.

Do firms with mature AI lose less business on speed?
71% of organisations running AI in business-critical workflows lost business on speed last year, compared with 99% of those piloting AI. 54% of the advanced group still struggle to connect their core with broker, bureau or settlement processes.

Does slow strategy execution cause lost business?
The survey shows a strong association and does not prove cause. The report treats both as symptoms of disconnected systems and processes that slow the whole operation.

Why is core modernisation harder in the London Market?
Business moves between brokers, insurers and shared market infrastructure, each running its own systems. Respondents cite subscription and multi-party underwriting (43%) and multiple systems across the policy lifecycle (42%) as the top barriers.

How do executives and directors see the problem differently?
C-suite respondents are nearly twice as likely as directors to say strategy reaches the desk immediately (19% versus 10%). Directors cite subscription underwriting (53% versus 31%) and market connectivity (46% versus 26%) as barriers far more often.