P&C Insurance Software Spending Shifts Toward Core Systems and Data Capabilities in 2026

New Jersey, United States, Oct. 27, 2026 (GLOBE NEWSWIRE) -- Property and casualty (P&C) insurers are increasingly directing technology budgets toward core insurance systems and data capabilities as carriers seek to improve access to operational information and support underwriting, pricing, and claims processes. The shift reflects growing attention to the systems and data infrastructure that support insurance operations, rather than focusing primarily on customer-facing digital applications.

For much of the past decade, insurance technology investment focused heavily on customer portals, mobile applications, digital quoting, and claims intake. While these projects improved digital interactions, they did not necessarily address the underlying systems and data capabilities that influence underwriting performance.

The combined ratio remains an important measure of underwriting performance, and recent industry analysis has pointed to continued pressure on insurers. According to the source material, Deloitte's outlook expects the ratio to deteriorate through 2026, continuing a trend observed since 2024. The changing environment is contributing to greater attention on risk selection, pricing, claims performance, and the technology infrastructure supporting those activities.

Core Modernization and Data Investments Become More Closely Connected

Insurance carriers are increasingly treating core-system modernization and data modernization as connected technology initiatives. Replacing a legacy policy administration or claims system does not necessarily resolve data-access challenges if information remains difficult to extract, reconcile, or distribute to analytical systems.

The source material cites analyst estimates placing North American core modernization spending at approximately $10.5 billion across 2024 through 2026. It also identifies data capabilities as an important factor in determining whether technology investments deliver their intended business value. 

As a result, insurers evaluating P&C insurance software are increasingly considering how operational data is exposed alongside traditional functionality. Key considerations include the events a platform can publish, the format in which information is provided, the speed at which it becomes available, and the amount of reconciliation required before downstream systems can use it.

Data Access Emerges as a Key Software Evaluation Criteria

Data exposure is becoming a specific consideration when insurers evaluate core technology platforms. Areas for assessment include transaction-level event availability, data latency, documentation and stability of data models, data completeness, and direct access rights.

For example, carriers can evaluate whether a platform provides detailed information about policy changes, endorsements, payments, reserve movements, and claim-status changes, rather than relying primarily on periodic summaries. Buyers can also establish measurable expectations for data availability rather than relying on broad descriptions such as "near real time."

Contractual provisions related to data access and portability can also influence technology decisions. Insurers may need to establish whether they can access, query, and replicate their own operational data for use in internal data warehouses and other systems.

Pricing and Claims Processes Depend on Timely Operational Data

The connection between core systems and analytical capabilities is particularly relevant to pricing and claims processes.

In pricing, written premium and emerging loss information can feed rate adequacy analysis and subsequent filings. Faster access to operational information can reduce the delay between emerging experience and analytical review.

Claims data can similarly support reserving, triage analysis, and vendor evaluation. Detailed information about claim outcomes can allow insurers to examine results by factors such as adjuster, vendor, jurisdiction, and injury type. When this information requires significant manual preparation, analytical decisions may be delayed.

Catastrophe and Exposure Data Add to Data Requirements

Property exposure is another factor contributing to the focus on data capabilities. Modern underwriting and catastrophe analysis can require information at the location level, including details related to secondary perils, wildfire and convective storm exposure, roof age, construction characteristics, and geospatial risk.

Legacy systems that represent a property primarily through a single address and construction classification may not provide the level of detail required by contemporary catastrophe models. The issue therefore extends beyond whether an insurer possesses the underlying information to whether its systems can capture and expose that information in a usable format.

Detailed exposure information can also support reinsurance discussions and regulatory processes. The source material notes that preparing supporting information for rate filings can take significant time when data is difficult to access or requires extensive preparation.

Considerations for Insurers Evaluating New Technology

The changing investment pattern provides several considerations for insurers evaluating technology platforms:

1. Review the integration architecture. Insurers can request documentation covering published events, APIs, data models, and upgrade compatibility.
2. Test the platform using a real analytical question. Demonstrating how an actuarial or claims analytics team would obtain information can provide insight into the practical effort required to use the data.
3. Include data requirements in the technology business case. Additional data-platform work should be considered when estimating the full cost of a core-system modernization program.
4. Evaluate the impact of upgrades on the data model. Buyers can determine which data structures remain stable after upgrades and which downstream systems may require changes.
5. Establish data-access and portability rights contractually. Insurers can clarify their rights to access, replicate, and move their own operational data before signing an agreement.

Customer-Facing Technology Remains Part of the Technology Strategy

The shift toward core systems and data capabilities does not eliminate the role of customer-facing technology. Digital distribution can influence quote abandonment and submission volumes, while agent, broker, and claims communication experiences can affect how customers and intermediaries interact with insurers.

The distinction is increasingly related to sequencing. Customer-facing applications depend on the operational systems beneath them. A digital claims interface, for example, cannot independently resolve delays or information limitations within the underlying claims system.

As a result, insurers may increasingly prioritize the underlying operational and data capabilities before extending those capabilities through customer-facing applications.

Technology Spending Reflects Greater Attention to Data and Core Infrastructure

The changing allocation of P&C insurance technology spending in 2026 reflects greater attention to the relationship between core systems and data capabilities. For insurers, evaluation criteria increasingly extend beyond application features to include data availability, structure, latency, portability, and integration requirements.

These capabilities can influence how effectively operational information reaches pricing, underwriting, claims, and analytical functions. As carriers assess modernization projects, the ability of a platform to provide usable operational data may therefore become an important part of the overall technology assessment.

About Damco Solutions 

Damco Solutions is a global IT services and digital transformation company specializing in AI and machine learning, custom software development, enterprise data services, cloud modernization, and insurance technology. Founded in 1996, the company provides these services to mid-market and large enterprises across more than 32 countries. Its work focuses on helping businesses use technology as a strategic asset through technical expertise, reliable delivery, and a strong customer focus. The company is headquartered in Plainsboro, New Jersey, USA, with offices and delivery centers in the UK, Luxembourg, India, and the UAE.

Contact

Tatiana K

Damco Solutions

info@e-cabilly.com

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• P&C Insurance Software Spending Shifts Toward Core Systems and Data Capabilities in 2026

Contact
Tatiana K
Damco Solutions
info@e-cabilly.com