The Insurance Technology Platform Shakeout: Winners, Pretenders, and Why Your Next Hire Matters More Than Your Next Feature

I have spent the better part of the last decade building and scaling insurance brokerages and SaaS platforms. I have sat in carrier meetings where the CTO could not explain their own tech stack. I have watched startups raise $20 million and then struggle to close a single enterprise deal because nobody on the team had ever placed a risk. I have seen brilliant technology die on the vine because the sales team could not get past a gatekeeper at a regional wholesaler.

So when I look at the current insurance technology landscape, I am not evaluating it as an outside observer. I am looking at it as someone who has been in the room when the buying decisions get made, and in the room when the platform either delivers or does not.

What follows is my honest read on where insurance technology platforms stand right now, which companies are positioned to matter, and the one problem that almost nobody in insurtech wants to talk about.

The Legacy Core Is Not Dying. It Is Just Getting Expensive to Defend.

Let me be clear about something upfront: Guidewire, Duck Creek, Majesco, and the rest of the legacy core vendors are not going anywhere. Guidewire has roughly 450 insurer deployments globally and just crossed $1.2 billion in revenue with 19% ARR growth. Duck Creek, backed by Vista Equity, is pushing a 90-day implementation guarantee that has gotten attention. Majesco earned recognition from QKS Group as the "Most Valuable Pioneer" in AI maturity for P&C core platforms in 2025. These are serious companies doing serious revenue.

But here is what I keep hearing from the carrier side, and I hear it consistently enough that I think it is worth saying out loud: the ROI on these platforms has been disappointing relative to the investment. The average enterprise core implementation still takes five to seven years. Carriers routinely deploy for one line of business, then run out of budget and political capital before they get to the next one. The total cost of ownership over a decade can push into nine figures. And the actual operational intelligence these platforms deliver? Mostly limited to quote-and-buy and basic distribution workflows. The kind of real-time, portfolio-level underwriting intelligence that carriers actually need remains hard to get out of systems that were architecturally designed to record transactions, not make decisions.

One term I have heard used in industry circles that I think captures the situation well is "new legacy." Guidewire was founded in 2000. Duck Creek, Sapiens, and Majesco all trace their roots to the same era. Cloud migration, in many cases, meant hosting the same rigid enterprise application on AWS or Azure. The fundamental architecture did not change. The armies of systems integrators and consultants still show up. The upgrades still take years and cost millions.

None of this means these platforms are bad. It means the bar for what "good" looks like has shifted, and the old core has not shifted with it fast enough.

The Funding Data Tells You Exactly Where the Market Is Heading

Forget the thought leadership pieces and the conference keynotes for a minute. Look at where the money is actually going.

Global insurtech funding rose 19.5% in 2025 to $5.08 billion, the first annual increase since 2021, per Gallagher Re. But the number that matters is this: 78% of Q4 2025 insurtech funding went to AI-centered companies. Not companies that mention AI on their website. Companies where the AI is the product.

P&C insurtech funding rebounded 34.9% to $3.49 billion in 2025. Mega-rounds came back after a long dry spell. Federato, CyberCube, ICEYE, Creditas, and Nirvana collectively pulled in $662.81 million in Q4 alone. Re/insurers made 162 private insurtech investments in 2025, more than any year on record. That last number is particularly telling because it means the incumbents themselves are placing bets on the new platforms, not just the venture capital firms.

Andrew Johnston at Gallagher Re said something in the Q4 report that stuck with me: AI is becoming so integrated into insurtech that the two may well become synonymous. I think he is right. And I think the implications of that for everyone in the insurance value chain are significant.

What makes this cycle different from the 2020-2021 insurtech bubble is the discipline. Deal counts dropped to their lowest level since early 2020, but average deal sizes climbed to $15.70 million. Investors are writing fewer, bigger checks and demanding profitability paths, not just growth stories. That is a healthy market correction, and it is concentrating capital into the platforms that can actually demonstrate measurable impact on insurance operations.

Federato: The Company That Is Actually Replacing the Old Core

I want to spend some time on Federato because I think they represent something genuinely new in this market, and I think a lot of people in the industry have not fully grasped what they are building.

Founded in 2020 out of Stanford, Federato raised $100 million in Series D in November 2025 led by Goldman Sachs Growth Equity, with Emergence Capital, Caffeinated Capital, StepStone, and Pear VC returning. Total raised: over $180 million. Revenue tripled in the past year. Daily active users tripled. Dozens of carrier and MGA customers. Revenue in the tens of millions.

Those are impressive numbers. But the reason I keep coming back to Federato is not the fundraise. It is the positioning. This is the first company I have seen that is credibly replacing legacy core systems with a platform that was built around AI from scratch. Not AI bolted onto an existing policy administration system. AI as the foundational architecture.

Here is why that distinction actually matters in practice. The traditional core vendors have collectively made over 90 acquisitions across platforms that average 36 years old. Their AI capabilities are integrations by definition. Different codebases, different data models, different assumptions about how information flows. You can make that work. It is just slow, expensive, and brittle. Federato was designed from day one as an integrated, AI-native environment. The data flows. The models connect. The intelligence is in the workflow, not sitting in a separate tool that an underwriter has to switch tabs to access.

The proof is in what their customers are doing. QBE North America, a carrier with over $11.5 billion in global GWP, had tried and failed multiple times to digitally transform their underwriting before they found Federato. They went from pilot to production in weeks, scaled from 50 to 300+ underwriters across seven lines, and have been progressively replacing their Majesco footprint. QBE projected a payback period of under 12 months with an IRR between 70% and 400%. Those are not theoretical numbers. That is a real carrier with real premium volume seeing real results.

Ascot, Mission, HDVI, Frederick Mutual, Propeller: the customer list keeps growing. In more than half of its deployments, Federato now functions as the effective core system. That is the stat that should get legacy vendors nervous.

The October 2025 launch of Federato's enterprise-grade agentic AI and Control Tower brought the picture into sharper focus. Control Tower takes static underwriting guidelines and turns them into real-time guardrails that actively govern risk decisions as they happen. The agentic AI generates complete, explainable quotes in minutes, aligned to the carrier's live portfolio strategy. And it spans the full policy lifecycle, from submission intake through issuance.

For anyone who has spent time inside a carrier operation watching underwriters toggle between nine different systems to process a single submission (I have), the idea of consolidating that into one AI-native platform is not just attractive. It is overdue.

The Rest of the Competitive Landscape: Who Else Matters

Federato is the company I think is furthest along in the full lifecycle replacement play, but they are not the only serious player in AI underwriting. The competitive landscape is worth mapping because it reveals the tiers forming in this market.

Sixfold crossed one million underwriting submissions processed across 40+ lines in late 2025. Their customer base includes Zurich North America, AXIS, and Generali. Skyward Specialty, the Nasdaq-listed specialty carrier, partnered with Sixfold in December 2025 and their CEO Andrew Robinson called it part of an "AI underwriting arms race." Sixfold has achieved an 89% average user adoption rate, with customers reaching business value in 2.4 months. Those adoption numbers are notable because the industry average for AI initiatives making it past pilot is a dismal 7%, according to BCG.

Kalepa is playing in the same space with a "Professional-Grade AI" positioning. Their argument, and it is a good one, is that 70% accuracy is useless in underwriting when the standard needs to be 99.5%+. Partnerships include Munich Re Specialty North America, SECURA Insurance, and a growing roster of MGAs. They have expanded into quoting, binding, rating, and document intelligence.

Earnix holds the pricing and decisioning layer. Indico Data and Heron have carved out positions in data extraction and specialized risk assessment.

The market is forming three tiers, and it is worth paying attention to which tier a company sits in. At the top: full-lifecycle, AI-native platforms that are replacing the core system. Federato is the clearest example. In the middle: specialized AI tools that augment a specific function like triage or appetite scoring but do not replace the underlying infrastructure. At the bottom: legacy core vendors trying to bolt AI onto architectures that were not built for it.

The middle tier is the most precarious position. As the top-tier platforms expand their functionality, the standalone value of a point solution shrinks. If a carrier deploys Federato and gets submission triage, portfolio management, quoting, and issuance in one platform, they do not need a separate triage tool. This dynamic is going to drive meaningful consolidation in the next 18 to 24 months.

The Distribution Technology Layer: A Different Problem Entirely

The carrier-side AI platforms are getting most of the capital and most of the attention. But the distribution technology layer has its own transformation happening, and it is the layer I have the most direct experience with.

CoverForce, named to CB Insights' 2025 Insurtech 50, is the API-first play for commercial insurance distribution. Founded in 2020 in New York, they raised $13 million in Series A in March 2025 from Insight Partners and Nyca Partners. The platform connects agencies, wholesalers, and corporate customers with carriers like AmTrust, Chubb, Liberty Mutual, and Travelers for instant quote-and-bind across commercial lines.

On paper, CoverForce's model is smart. Reduce integration timelines from months to weeks. Replace portal-hopping with API-driven workflows. Give carriers digital distribution channels without having to build the technology in-house. They have partnered with 20+ of the largest agency wholesalers and networks in the country and added AI capabilities for reading submissions with claimed 95%+ accuracy.

But distribution technology companies face a fundamentally different go-to-market challenge than carrier-facing platforms. You are not selling to a CTO evaluating a core system replacement. You are selling to agency principals, network operators, wholesalers, and PEOs who care about one thing: moving more premium faster. The sales cycle is shorter but the buyer universe is wildly fragmented. You need people on your team who understand production, commission structures, carrier appointments, and the daily grind of placing commercial business. People who can walk into an agency and be immediately credible.

This is where I have seen so many insurtech companies trip over themselves. They build terrific technology, raise significant capital, hire elite engineering talent, and then cannot translate product capability into revenue because they do not have people on the commercial side who have actually done the work. The technology-to-revenue gap is not a product problem. It is a hiring problem. And it is the most underappreciated risk in the entire insurtech ecosystem.

PolicyBound, based in Philadelphia and backed by Archetype with roughly $7 million raised, is another example worth examining. They are positioning as an AI-powered surety and specialty operating system, building on a legacy platform that previously handled hundreds of thousands of surety transactions. It is a legitimate niche opportunity with a team of about 15 people.

Surety is one of those corners of insurance that sounds simple until you are actually in it. Bond forms, obligee requirements, contractor prequalification, the layered relationships between agents, sureties, and obligees. A $50,000 bid bond and a $5 million performance bond require completely different conversations with completely different stakeholders. Technology demonstrations do not close deals in this space. Domain credibility does. And when startups underestimate that, they tend to burn through seed capital learning things that an experienced insurance professional could have told them during the first month.

The Uncomfortable Truth: Technology Does Not Close Deals in Insurance. People Do.

I keep coming back to this because it is the single biggest blind spot I see in insurtech right now.

Only 7% of insurance AI initiatives make it past the pilot stage. Sixfold cited that BCG stat when they announced their one million submission milestone, and they were right to call it out. The 93% failure rate is not because the technology does not work. It is because the go-to-market does not work. Deployment friction. Disconnected workflows. Organizational resistance. These are people problems, not engineering problems. They are what happens when you build a great product and then hand it to a sales team that has never placed a risk, never negotiated a commission override, never sat through a renewal meeting where the client is upset about a rate increase and the underwriter is not returning calls.

Federato has navigated this better than most. Their founding team has genuine insurance domain expertise. Their go-to-market is built around demonstrating underwriting outcomes, not selling technology features. When Will Ross talks about replacing the old core, he is not making a technology pitch. He is making a business pitch: faster time to value, measurable ROI, a platform that bends to the carrier's strategy rather than forcing the carrier to bend to the platform. That resonates with insurance executives because it is about their problems, not about the vendor's product.

The companies that win the next phase of this market will be the ones that figure out both halves: exceptional technology and exceptional commercial execution. And commercial execution in insurance means having people who know the industry from the inside, who have the relationships and the vocabulary and the pattern recognition that only comes from years of doing the actual work.

What This Means for Retail Brokers

The carriers you submit to are going to respond very differently depending on what technology they are running. An underwriter on Federato's agentic AI or Sixfold's platform can generate a complete, portfolio-aligned quote in minutes. An underwriter on a legacy system is still toggling between spreadsheets and email.

Carrier selection has always been part of the job. But the technology layer is about to make it a much bigger differentiator. A carrier running on a modern AI platform will price more accurately, respond faster, and write business that actually fits its appetite. A carrier on legacy systems will keep quoting slowly, declining submissions it should have written, and writing risks it should have declined. The brokers who learn which carriers have invested in AI-native underwriting and route their best submissions accordingly will have a real edge.

On the distribution side, API-driven quoting platforms are going to kill the six-portal workflow. If you are still logging into individual carrier portals, re-entering the same data each time, and waiting days for a response, you are working harder than you need to. Brokers who adopt API-enabled platforms early will move faster, and speed compounds over time.

What This Means for Wholesale Brokers

Wholesale sits at the most interesting intersection of this whole transformation. You are simultaneously a customer of distribution technology and the pipeline through which carrier AI underwriting reaches the retail market.

The good news: AI-native underwriting does not reduce your value. It amplifies it. A wholesale broker placing business with a carrier that runs on Federato can offer retail brokers faster turnarounds, sharper pricing, and more confidence that submitted risks will actually bind. The wholesalers who understand which markets are using AI to expand appetite, not just restrict it, will pull disproportionate share.

The risk: carriers that can process submissions at machine speed may start questioning whether they need a wholesale intermediary for every transaction. For complex, large, and non-standard risks, the answer is yes. For smaller, more standard stuff that flows through wholesale primarily because retail lacks direct access, the math could change.

What This Means for Underwriters

AI is not going to take your job. But AI is going to make the gap between a productive underwriter and an average one a lot wider. An underwriter using Federato's Control Tower sees how every risk decision impacts portfolio performance in real time. An underwriter using Kalepa's Copilot gets risk insights and decision-ready quotes in minutes. An underwriter using Sixfold has autonomous agents handling the research and documentation. These tools do not replace judgment. They give good judgment more leverage.

The career implication is real. Underwriters who develop fluency in AI-augmented workflows are going to command premium compensation. Skyward Specialty's CEO explicitly called their Sixfold partnership part of an "AI underwriting arms race." Carriers are competing for underwriting talent that can operate at the intersection of domain expertise and technology. That is where the market is pricing the premium.

The Consolidation That Is Already Starting

There are too many insurtech companies, solving too many narrow problems, with too little differentiation. The funding data already shows the correction: fewer deals, bigger checks, capital concentrating into AI-native platforms with real traction.

Munich Re acquired NEXT Insurance at $2.6 billion. Accelerant went public at $3.4 billion. Those are proof points that the market rewards insurtech models with real underwriting discipline and capital efficiency. But they also signal that smaller, undifferentiated players are going to get absorbed or shut down.

For the AI-native platforms, the strategic play is clear: establish yourself as the independent alternative to the old core before the old core acquires its way into relevance. Federato's Series D messaging was explicit about staying independent. Goldman Sachs's investment is a bet on that independence. But independence requires sales growth that outpaces the market, and sales growth requires a go-to-market organization staffed with people who actually understand enterprise insurance procurement. Not just technically. Commercially.

The Takeaway

The insurance technology landscape is sorting itself into winners and pretenders, and the sorting mechanism is not who has the best AI model. It is who can pair that model with the commercial execution to actually get it deployed inside insurance organizations.

The funding is flowing to AI-native platforms. The carrier procurement decisions are trending away from the old core. The talent is migrating toward companies that operate at the intersection of deep insurance expertise and modern technology. And the companies that solve only one half of that equation, great tech with no commercial chops, or great salespeople with a mediocre product, are running out of runway.

I have been in this industry long enough to know that the incumbents are resilient and that transformations always take longer than the optimists predict. Guidewire is not going to lose 450 carrier deployments overnight. But the trajectory is clear. The platforms that win the next decade will be the ones where the intelligence is native, the data flows in real time, the technology adapts to the business rather than the other way around, and the sales team can actually speak the language of the people writing the checks.

That last part is the one most insurtechs keep getting wrong. And it is the part that will determine who is still standing in three years.

Fabio Faschi is an Insurance leader, National Producer, Board Member of the Young Risk Professionals New York City chapter and Committee Chair at RISE with over a decade of experience in the insurance industry. He has built and scaled over a dozen national brokerages and SaaS-driven insurance platforms. Fabio's expertise has been featured in publications like Forbes, Consumer Affairs, Realtor.com, Apartment Therapy, SFGATE, Bankrate, and Lifehacker.