Test Management in the Insurance Industry: Avoiding 7 Pitfalls

In the insurance industry, software quality is directly business-critical. Errors in rate calculation logic, claims processing, or policy management processes have a direct impact on the customer experience, costs, and reputation.

While a minor display error in a social media app might be forgivable, it is fatal in an interest calculation. A rounding error to the fourth decimal place can lead to massive financial losses across millions of transactions. Legal issues are also a possibility.

Insurers face a massive challenge. They must integrate decades-old legacy systems (mainframes) with modern, fast-paced digitalization requirements.

Added to this are stricter requirements effective in 2025 under the Digital Operational Resilience Act (DORA) and the EU AI Act. Test management must reflect this reality. It is no longer just about “user experience.” It is also about mathematical precision and legal compliance.

1. The Legacy Trap: Legacy Systems That Cannot Be Integrated

Insurers struggle with outdated core systems (often written in COBOL) that are difficult to integrate with new front-end systems.

Solution: Use middleware and API-based architectures to isolate core systems and perform targeted integration and regression testing.

2. Lack of Realistic Test Data

Real customer data is off-limits due to the GDPR. Synthetic data often fails to accurately reflect highly complex policy logic or insurance histories.

Solution: Use tools for data protection-compliant anonymization or generate logic-based synthetic datasets that function consistently across all silos.

3. Complexity of Product and Regulatory Frameworks

Insurance products have extremely complex sets of rates and terms and conditions. Changes in one area often have unforeseen consequences in other areas (silo structure).

Solution: Implement model-based test automation that maps mathematical rules and automatically generates test cases for edge cases.

4. The balancing act between agility and regulation (compliance)

Agile development demands rapid releases, while BaFin/DORA and internal audit require comprehensive documentation. DORA will be fully in effect starting in 2025: Testing alone is no longer sufficient; operational resilience must be comprehensively demonstrated.

Mitigation: “Compliance-by-Design.” Test documentation and evidence must be automatically generated from the agile toolset (e.g., Jira/Xray) to remain audit-ready.

5. High manual testing effort and a shortage of skilled personnel

Manual testing is too slow for modern release cycles, which inevitably leads to bottlenecks as release frequency increases. However, automation engineers require in-depth domain knowledge of financial products to be able to map complex logic at all.

Mastery: Building interdisciplinary teams (DevTestOps) in which subject matter experts and testers work closely together and are supported by automated quality gates.

6. Fragile end-to-end processes due to complex interfaces

A test case begins in an app, passes through a CRM, ends up in a booking system, and concludes in the archive. These chains spanning different platforms (legacy vs. cloud) are extremely prone to errors.

Mastery: End-to-end (E2E) tests that validate the entire business process, including real-time processing (e.g., instant payments).

7. Cyber resilience and new requirements due to AI regulation

Attacks are becoming more complex due to AI. At the same time, the EU AI Act requires testing for fairness and transparency when AI is used for scoring or fraud detection.

Mastery: Integrate threat-oriented penetration testing (TLPT) into the CI/CD pipeline and break new ground in the testing of AI models.

puntus supports insurance companies in test management not only on an operational level, but also as a management and governance partner.

We make quality predictable. With a risk-based testing strategy, clear traceability, and an integrated approach that spans teams, providers, and system boundaries.

Software testing in the insurance industry is not your typical testing. While other industries often focus on design, compliance, data security, and technical accuracy are the key factors here.

If you want to implement digital transformation projects more quickly without taking on additional risks, it’s worth taking a structured look at your test management.

A targeted review of your test management governance will reveal where the issues lie and where you can take concrete action.

We would be happy to help you create transparency and further develop your test management in a targeted manner.