Pilot Blackhole: Why 80% of InsurTech Pilots Never See Production (And How to Fix It)

Congratulations. You've won the pilot.

Champagne corks pop. Your board thinks you're brilliant. The press release written.

Then, eighteen months later, you're still waiting for that production contract. The pilot "went well"—their words, not yours—but now they're "evaluating next steps" and "aligning stakeholders."

Which is also means "we're never calling you back."

The numbers nobody are a little scary

80-90% of AI pilots in insurance fail to scale beyond proof-of-concept.

Only 22% of insurance companies have AI solutions fully in production.

That's not a technology problem. That's a business model problem—and it's costing InsurTech companies years chasing deals that were never going to close.

Why insurers love pilots (and why that should terrify you)

From the insurer's perspective, pilots are perfect.

Low financial risk. Minimal IT commitment. Makes them look innovative to their board without actually committing to anything. And if it fails, well, it was only a pilot.

The incentive structure is completely misaligned. Your incentive is to turn the pilot into production revenue. Their incentive is to look like they're innovating whilst changing absolutely nothing about how they actually operate.

The three reasons pilots never convert

First: You solved the wrong person's problem.

The Claims Director who sponsored your pilot genuinely loves your product. But the CTO who controls the production budget thinks your solution creates integration nightmares. And the CFO who signs off on enterprise deals thinks your pricing model doesn't make sense at scale.

You've got one champion and three people who can kill the deal. Bad maths for you.

Second: The pilot success metrics were theatre.

"Reduce processing time by 30%" sounds brilliant until you realise that nobody's bonus depends on processing time. The metrics that matter to the board—combined ratio, customer retention, premium growth—weren't part of your pilot at all.

You proved the product works. You didn't prove it matters to the people who actually make buying decisions.

Third: Implementation fear is real.

During the pilot, you did all the heavy lifting. Integration, training, change management—you handled it because you needed the pilot to succeed.

Now they're looking at production deployment and realising they'll need to do actual work. Retrain staff. Change processes. Navigate internal politics. Deal with their compliance team having opinions about everything.

Suddenly the savings don't seem worth the bother.

How to escape pilot purgatory

Write the production path into the pilot contract.

Not "if this goes well, we'll discuss production." Actual commitments. "If we hit X metric by Y date, production rollout begins within 90 days, subject to these specific conditions."

Make them declare their production requirements upfront. Budget approval process. Integration requirements. Security protocols. Compliance sign-offs.

If they won't commit to those terms, they were never going to buy anyway. You've just saved yourself eighteen months.

Design pilots that can't be ignored.

Pick one genuinely painful problem that affects their P&L directly. Not "improve efficiency" but "reduce loss ratios by 15% in commercial motor."

Make the success metric something their board actually cares about. Something that shows up in quarterly earnings calls.

Then make sure the pilot runs long enough to prove sustained impact. Three months isn't enough. You need at least two quarterly business reviews where executives see your impact in their actual numbers.

Solve the political problem, not just the technical one.

Your champion in Claims can't authorise a £500k production deal on their own. So stop selling to them.

Use the pilot period to identify every person who can kill the deal. CTO, CFO, Chief Risk Officer, Head of Compliance, the Finance Director who controls budget allocation.

Then systematically eliminate their objections before production discussions even start. Security documentation. Integration specifications. Compliance frameworks. ROI models that use their internal data.

By the time you're asking for production approval, every potential "no" has already been neutralised.

Know when to refuse the pilot.

Not every pilot request is serious. Some are just procurement theatre—they need three bids to justify buying from their old school legacy vendor.

Some are fishing trips—they want free consulting on their problems with no intention of ever buying anything.

And some are building business cases for internal teams—they're using your pilot to prove they should hire developers, not buy your product.

If they won't commit to production criteria upfront, if they won't give you access to decision-makers beyond your sponsor, if the pilot timeline keeps extending with no clear milestones—walk away.

Your time, money, patience and mental health have limits. Spend it on deals you can actually close.

The reality of the situation

Most InsurTech companies treat pilots as the finish line.

They're not. They're the starting point.

The real sale—the one that gets you into production and generates actual revenue—doesn't happen during the pilot. It happens in the six months after, when you're navigating procurement processes, eliminating stakeholder objections, and proving you can actually integrate with their legacy nightmare without bringing down their entire operation.

80% of pilots fail because InsurTech companies think they're selling technology.

They're not. They're selling organisational change. And that's an entirely different problem.

What's been your experience with pilot programmes? Have you escaped the pilot blackhole, or are you still stuck in it?