Why Manual Processes Are Holding Back Property & Construction Insurers

All too often, property and construction insurers remain shackled to legacy workflows and stacks of paper. These antiquated systems introduce delays at every step – from onboarding to claims to policy changes. In fact, 83% of insurance leaders now acknowledge that innovation is critical to future success, yet many still lack the tools or skills to modernize【41†】. The result: costly bottlenecks, data errors, regulatory risks, and angry clients. As one industry analysis bluntly notes, the insurance sector “is historically characterized by legacy, manual processes,” making digital transformation essential. Operations teams at midsize insurers risk falling behind unless they tackle these inefficiencies head-on.

Legacy Systems and Siloed Workflows

Insurers have built their businesses on decades of incremental IT and manual process patch‑ups. Unfortunately, those legacy mainframes and fragmented databases are more of a liability today than ever. A recent industry report warns that legacy platforms, while once “robust and reliable,” are now “increasingly becoming liabilities” if not modernized – introducing risk and compliance concerns that must be addressed urgently. Silos abound: policy data, underwriting rules, and claims documents often live in separate systems or even paper files. Simple tasks like verifying coverage or updating client records can require dozens of manual steps or back-and-forth emails. In this environment, human error is inevitable. One analyst found that labor-intensive claims admin alone accounts for 70–80% of insurers’ costs, while even a 1% error rate in data entry quickly snowballs into thousands of dollars in rework. Worse, disparate systems make compliance a nightmare. Regulators expect complete audit trails and timely filings, but old systems often lack the interfaces to share data smoothly. Legacy platforms “were not designed for today’s interconnected world,” meaning integration requires costly workarounds and invites data mismatches. In short, outdated workflows breed inefficiency at best and regulatory penalties at worst.

Slow, Error-Prone Claims Handling

Nowhere do manual processes hurt more than in claims processing, where speed and accuracy directly affect the balance sheet and customer satisfaction. Traditionally, a complex property or construction claim can involve inspectors’ reports, subcontractor bids, policy endorsements, and compliance reviews – often all on paper. This slows every payout. Industry data underline the drag: inefficient claims handling could put up to $170 billion of premiums at risk over five years as frustrated policyholders switch carriers. In recent surveys, roughly one-third of claimants said they were dissatisfied with their insurer’s handling, citing slow settlement times and complex closing processes. In fact, 60% of dissatisfied customers point to sluggish claim turnaround as the problem.

By contrast, automated claims workflows dramatically cut cycle times. Accenture reports that AI and automation can halve claims processing times while improving accuracy by about 30%. Digital triage tools (like mobile app intake forms and AI chatbots) can now capture loss details instantly and route claims to the right adjusters – something that used to take days of data entry. The financial impact is stark: manual claims can cost carriers roughly $40–60 per claim, whereas automated processing often brings it under $20. Even beyond cost, manual claims create opportunities for fraud and error. Automated algorithms, by flagging anomalies and enforcing consistent rules, reduce fraud losses and rework.

All told, legacy claims processing is enormously wasteful. Analysts estimate billions in lost efficiency: underwriters in P&C firms currently spend around 40% of their time on non‑underwriting tasks (data rekeying, admin, etc.), representing some $85–160 billion in inefficiencies globally over five years. For claims teams, the picture is similar: slow, manual handling means insurers tie up capital in unpaid reserves longer and miss chances to delight clients. No wonder dissatisfied claimants are quick to churn – studies show 74% of unhappy claimants will switch or consider switching insurers.

Painful Onboarding and Policy Administration

The headaches extend to new business and policy servicing. Client onboarding is notoriously paperwork‑heavy. Insurers typically collect dozens of forms and inspections reports before issuing even a simple builder’s risk policy. This old‑school approach not only slows revenue capture, it frustrates agents and customers alike. PwC and IBM data indicate that 41% of insurance buyers would switch providers if digital capabilities are lacking. Shockingly, half of insurers still depend on physical mail for customer communications. Every extra day of delay or confusing form fuels leakage: prospective construction clients may abandon one carrier for another if the quoting and issuance process drags.

Policy administration suffers similar pains. Legacy admin systems often require underwriters and staff to juggle multiple applications for renewals, endorsements, and cancellations. Rate filings and documentation approvals often flow by email or even fax. This invites human error – a miskeyed digit, a missed signature – with big consequences. Compliance suffers here too: missing a renewal notice or failing to apply a new regulation can mean fines or regulatory censure. In short, each manual touchpoint is a slip‑up risk. When any part of the policy or client data must be re-entered or reviewed by hand, the chance for omission or inconsistency rises. One insurance analyst notes that “a lack of technical knowledge” and siloed legacy systems directly lead to poor data integration and operational risk.

The cumulative effect is a downward spiral: manual onboarding and admin mean slower quotes and service, which means lower retention and slower growth. In a hard market for property insurance, carriers can ill afford the drag.

The High Cost of Delay and Error

How bad are the stakes? Consider this: Claims processing and underwriting inefficiencies are measured in tens of billions of dollars of wasted premiums and expense every year. One report cites $170B annually drained by claims processing inefficiency and underwriting backlogs. Globally, insurers see up to 8% loss‑ratio improvements simply by digitalizing processess. Straight‑through processing and rapid self‑service could eliminate days of waiting: McKinsey projects that nearly all repetitive admin work in pricing, underwriting, policy issuance and claims could be automated by 2030. In fact, by next decade carriers have the opportunity to slash operational costs by up to 40% while boosting customer satisfaction.

Even today, forward‑leaning insurers report measurable gains. An EY industry survey notes that “automation and digitization are essential to creating lean, flexible and agile operating environments,” cutting costs and accelerating customer. Swiss Re Institute research similarly finds carriers aiming for 3–8% improvement in loss ratios and 10–20% savings across their value chain through automation and AI. Meanwhile, 60% of insurers admit using digital tools (e.g. portals, chatbots, automated claims systems) to improve service and cut manual labor. These early adopters see up to 30% productivity jumps in risk and compliance functions simply by deploying smart automation.

In short, the business case for modernization is clear. Every hour spent in data re‑entry or paper chases is an hour insurers aren’t using to win new business or serve customers.

A Path Forward: Integration and Automation

The solution lies in tightly integrated, automated workflows that mirror how teams actually work. Modern platforms – including tailored workflow engines like those from Holistc™ – can connect underwriting, policy admin and claims in real time. For example, a property claim entered through a mobile app can instantly update the policy system, trigger automatic compliance checks, and notify the right adjuster, all without a single manual hand‑off. Holistc™’s approach (as an example) is to build custom digital tools around existing practices: contracts and forms become interactive web forms; email requests become automated task flows; data once buried in PDFs becomes instantly reportable. In this way, carriers replace paper with dashboards.

The results speak for themselves. Integrated automation virtually eliminates lost documents and missed deadlines, cutting average processing times dramatically. One insurer that overhauled its claims workflow found approvals now happen in minutes instead of days. Labor costs drop as repetitive tasks vanish, while compliance officers get full transparency on audits. Managers and agents can log into a portal to see each case’s status – no more phone tag or digging through inboxes. And with fewer errors, customer satisfaction climbs.

Built‑for purpose tools also preserve agility. Unlike rigid off‑the‑shelf systems, a custom workflow platform can be adjusted as rules or products change – crucial in a sector dealing with evolving building codes, safety regulations, and risk profiles. And by embedding automation (OCR, data validation, AI decision‑support) only where it makes sense, insurers keep people in the loop for complex judgments while freeing them from mundane work. Industry experts agree that the next wave of digitization is all about connecting critical processes end‑to‑end. Carriers that do this not only cut administrative costs but also gain a strategic advantage – they can innovate faster, respond to disasters in real time, and offer customers a truly modern experience.

Time for an Audit and Action

For mid-sized property and construction insurers, the imperative is clear: audit your workflows now. Identify where paperwork piles up, where systems fail to talk, and where compliance could slip through cracks. Then, work with your teams to map out the real steps they take (not the way an old system forces them to work). The good news is that custom automation solutions – from low-code platforms to Holistc™’s targeted tools – can be designed around those actual processes, preserving business logic while eliminating waste.

In the current market, carriers that fix their internal draggers will win. By cutting processing time, slashing administrative costs and improving accuracy, they not only underwrite and settle claims more profitably, but also keep clients happier and more loyal. The industry statistics are unanimous: continuing with manual processes is simply unsustainable. Take the first step today: review your legacy systems, map your key workflows, and explore a tailored automation roadmap that fits how your teams actually work. Your next claims cycle – and your balance sheet – will thank you.