How insurers can minimise the impact of system outages

Observability is no longer a ‘nice to have’; it’s a strategic differentiator.

IT outages are not uncommon, especially amidst rising cyberattacks and other malicious activity across Asia Pacific (APAC). 

High-profile outages affecting major technology vendors reinforce the risks APAC businesses face when critical systems go offline. Insurers are particularly vulnerable to IT disruptions, with outages preventing customers from lodging or receiving claims, delaying service delivery, and exposing them to phishing scams designed to exploit uncertainty. These incidents also carry significant financial and reputational consequences, damaging trust in an already competitive sector.

Customer experience is directly linked to retention and revenue, meaning even brief downtime can have outsized effects. Customers expect always-on access to digital services, and any deviation can erode confidence, particularly when handling sensitive or time-critical claims. 

Regulatory expectations are also rising, adding further pressure on insurers to demonstrate operational resilience. The digital backbone of the insurance industry is under constant pressure as a result. 

Insurers need a proactive approach to outage prevention, response, and recovery as digital ecosystems become increasingly complex. A hybrid IT architecture with a unified visibility layer is essential to maintaining resilience in an era where downtime is not an option.

Traditional monolithic IT infrastructures struggle to keep pace with the demands of modern insurance operations. As IT environments have evolved, they have grown in complexity that spans on-premises, cloud, and edge computing, giving insurers greater flexibility and redundancy. 

Distributing workloads across multiple environments reduces organisational dependency on a single vendor or platform, mitigating the impact of outages. However, today’s IT environments have outpaced what humans can reasonably monitor and manage on their own.  

Insurers must navigate complex hybrid infrastructures spanning legacy systems, private clouds, multiple public cloud providers, and edge computing environments. 

When problems arise, they cascade. A minor database slowdown triggers application timeouts and widespread service degradation that impacts customers. 

Traditional tools designed for yesterday's simpler architectures cannot keep pace—they operate in silos, lack cross-platform visibility, and generate thousands of disconnected alerts that overwhelm even the most experienced operations teams. Implementing a centralised observability platform that provides a single pane of glass view across all IT environments lets insurers proactively monitor system health, detect anomalies, and respond to potential failures before they escalate.

Traditional disaster recovery plans often assume a controlled transition from one system to another; however, news-making outages in the past year have demonstrated the unpredictability of modern IT failures. Insurers must develop business continuity plans that reflect the modern digital-first landscape, keeping critical customer-facing services operational even when primary systems go down.  

Many outages escalate due to a failure to detect issues before they reach critical mass. Insurers can minimise downtime by deploying artificial intelligence (AI)-driven monitoring tools that continuously analyse system performance, identify patterns, and flag anomalies in real time. Early detection lets IT teams address underlying issues before they disrupt essential services. 

Additionally, automated responses to minor faults, such as rerouting traffic, reallocating resources, or triggering backup systems, can further reduce the risk of prolonged outages. Insurers can anticipate potential failure points and take pre-emptive action to maintain service continuity by leveraging predictive analytics and machine learning (ML).

Observability helps maintain alignment between customer expectations and back-end performance as insurers embrace digital transformation and modernise their platforms. It provides the operational intelligence to move beyond reactive firefighting, letting teams fine-tune infrastructure, improve performance, and reduce incident frequency.

When outages do occur, recovery speed is critical to minimising customer frustration and business disruption. Insurers must have a clear incident response framework that prioritises the restoration of core services while communicating with affected customers transparently. 

Providing timely updates on service status, estimated resolution times, and alternative options reassures policyholders and prevents the spread of misinformation. A well-handled outage can even strengthen trust, demonstrating an insurer’s commitment to service reliability and customer care.

Transparency also plays a key role in regulatory reporting. Maintaining detailed logs and observability data lets insurers quickly produce evidence of their response timelines, remediation actions, and compliance with industry mandates. This helps in audits and can inform improvements to future response protocols.

Technology alone cannot eliminate the risk of outages. A resilient organisation is built on a culture that prioritises operational continuity, invests in ongoing IT modernisation, and trains employees to respond effectively in crisis situations. 

Insurers should embed resilience into their corporate DNA, encouraging IT and business leaders to collaborate on risk management strategies rather than treating outages as purely technical issues.

Regulatory scrutiny on digital resilience is increasing, and insurers that fail to take proactive measures risk both financial losses and potential compliance breaches. Adopting a holistic approach to outage prevention, detection, and recovery safeguards customers, protects brand reputations, and maintains trust in an increasingly volatile digital landscape.  

Observability is no longer a ‘nice to have’; it’s a strategic differentiator. Proactive system monitoring and recovery capabilities are foundational to sustainable success in the insurance sector as digital reliance grows. 

Insurers that can demonstrate resilience, responsiveness, and continuous improvement will position themselves as trusted, future-ready providers.