Group protection providers may gain little from AI spending unless they modernise legacy systems and improve the quality, accessibility and governance of member data, according to Lumera.
Lumera has warned that group protection insurers could spend heavily on artificial intelligence and still fail to gain a decisive edge unless they improve the quality and accessibility of their customer data. The insurtech company argues that many providers are still tied to ageing administration systems, leaving them unable to make full use of the information AI needs to generate useful insights or efficiencies.
The company’s view reflects a broader challenge across the insurance sector: providers are accumulating large volumes of information through quotes, underwriting, enrolments, claims and customer service, but that data is often scattered across different platforms or organised around policies rather than individual members. Insurance Business Magazine has reported that this leaves some carriers with fragmented records that are difficult to analyse, while modern core platforms from vendors such as CoverGo are being positioned as a way to replace or integrate with legacy systems so insurers can handle policy administration and claims more effectively.
Lumera says the stakes are high because group protection insurers are under pressure to show clear returns from technology spending while maintaining the accuracy, security and reliability expected in a regulated market. The firm argues that AI could help automate routine administration, speed up claims handling, improve underwriting and support more tailored communications with scheme members, but only if the underlying data is complete, well structured and governed properly. Other insurance technology providers, including CriticalBridge.AI, Assured, Solix and Fiddler AI, have made similar points in promoting platforms that combine AI with stronger governance, auditability and controls.
Tim Stoves, Lumera’s group protection lead, said the industry should not treat AI as a shortcut to competitiveness. “AI is understandably attracting significant attention across the group protection market, but the industry needs to recognise that the technology itself is only part of the equation. Without the right data foundations, even the most sophisticated AI capabilities will be limited in what they can deliver,” he said. Stoves added that the long-term differentiator would be the quality and completeness of proprietary member-level data, and how well insurers use it to improve customer outcomes and build trust.
Lumera’s warning suggests that the next phase of insurance technology investment may be less about buying more AI tools and more about modernising the systems that feed them. For group protection providers, cleaner records and better-connected administration could bring faster claims decisions, sharper risk assessment and more responsive service. But the company’s wider message is that as AI becomes more common across the market, advantage is likely to come not from the software itself, but from the information insurers can reliably put behind it.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
