From Run to Reinvention: How Insurers Are Reshaping IT Spend to Fund the Future

Every insurance CXO is being handed the same impossible brief this year: modernize the core, deploy AI at scale, harden cybersecurity, elevate customer experience, and do it without a meaningful budget increase. The math does not work. Something has to give.

Most surveys tell you what your peers are prioritizing. This one tells you how they are financing it.

Wipro and Coleman Parkes surveyed 100 CXOs at US insurance organizations with revenues exceeding $500 million to examine where the industry is cutting, consolidating, and reinvesting. The findings reveal that IT cost transformation is no longer a finance exercise: it is a strategic capability, one that determines which insurers can fund AI, cybersecurity, and core modernization at the pace the market now demands.

The research offers a definitive benchmark for how the industry is turning structural cost simplification into competitive advantage, and a six-step blueprint for insurers determined to move from budget-bound incrementalism to self-funded reinvention.

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Key Takeaways

Insurance IT is trapped in a run-cost ceiling.

93% of insurers spend the majority of their IT budget on Run, with 58% allocating more than 2/3rds to maintaining existing systems. Only 7% currently spend more on Change than on maintenance.

Budget growth won't fund transformation.

77% of insurers expect IT budgets to rise next year, but just 23% anticipate increases above 10%, growth largely absorbed by inflation. Transformation must come from reallocation, not expansion.

Legacy is the barrier, but not the only one.

65% cite legacy platform costs as the single biggest constraint on budget reallocation, compounded by vendor lock-in, regulatory demands, limited internal capacity, and uncertain ROI on modernization.

The GCC inflection point has arrived.

36% of insurers plan to adopt Global Capability Centers in the next fiscal year, and 68% cite TCO reduction as the primary driver of vendor consolidation, signaling a decisive shift in operating models.

Success is measured by efficiency, not growth.

89% of insurers define success by improvements in operating efficiency and 65% by measurable Run cost reductions. Revenue growth from IT reallocation is a secondary, longer-horizon objective.

Naresh Ramaswamy

Head of Insurance Industry Consulting, Wipro

"Revenue growth tells the future story. Operating efficiency proves the value today. As 89% of insurance leaders prioritize efficiency, metrics such as cost per policy, expense ratio, and cost per claim have become the true currency of transformation success.”

Nilay Doshi

Senior Client Partner, Wipro

"The question is no longer ‘How do we reduce costs?’ but ‘How do we build strategic capability at scale?’ That shift is why insurers are embracing GCCs—to create deeper expertise, stronger control, and lasting advantage across data, AI, and engineering.”