Legacy Casts a Long Shadow

Despite being a top priority of the insurance industry for many years, legacy modernization efforts can seem almost Sisyphean in nature.

Yet, insurers are starting to make some real progress according to new research from Boston-based Celent. The report, “Still Seeing the Shadow: Groundhog Day for Legacy Modernization,” queried 115 property/casualty insurers in North America, Europe and Asia about the status of their legacy replacement initiatives.

“The movement to tackle the legacy problem in insurers is clearly under way, with almost half of respondents in this survey noting they were well into the journey,” the report , authored by Celent Senior Analyst Catherine Stagg-Macey states. “If we accept that legacy IT is an intrinsic part of any established insurer, and that this legacy is placing constraints on business flexibility, then the imperative of addressing this legacy comes as no surprise.”

While the business need to address legacy has long been obvious, the report notes a variety of technology factors including the maturity of service-oriented architectures and modern software has made it easier to address the challenge of legacy. “Core systems are more configurable than ever before, reducing the chance of creating future legacy,” the report states. “The track record of core system implementation has improved, along with more proven and reliable services from implementation partners. The outsourcing market has matured considerably, to the extent that, for many large insurers in America and the United Kingdom, outsourcing is an important strategic tool for the CIO.”

 

  

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