Insurers must upgrade technology to “bridge the digital divide”, according to a new report from financial services provider State Street.

After five years of retrenchment, insurers are once again turning their attention to growth.

But tapping new customer segments will require significant investment in technology to overcome historical challenges and provide new data and analytics tools.

“Our research reveals an industry poised for a new wave of growth, but sometimes struggling to build the technology foundations necessary to make that a reality,” the report says.

More than 300 insurance executives were surveyed for the study, with 30% from the Asia-Pacific region.

Only 28% say their company’s technology strategy is completely aligned with business priorities.

However, insurers are investing in a range of technologies.

Improved customer relationship management systems are a focus for 59% of respondents, while 57% highlight social media tools and 50% new customer insight technology.

“These investments are becoming essential because the market for insurance products is undergoing such rapid, disruptive change,” the report says.

New market entrants are using data-driven technology to transform business models, and incumbent insurers are struggling to keep pace.

“Insurers have to focus on turning data from a liability to an asset,” State Street Head of Insurance Sector Solutions North America Pete Thurmond said.

“To access new client segments and counteract new tech and data-driven competitors, it will become increasingly important for insurers to focus on collecting and analysing data to understand consumer behaviours and deliver tailored products that match those needs.”