While the mainframe era may seem remote to the public at large, things are different in the insurance industry. Mainframes and other legacy hardware and software continue to persist at insurance companies.

A new report from Boston-based Celent, “Reality-Checking the Evolution in Core Systems: Responding to the Real-World Technology Environment of Insurers,” assesses the industry’s progress in transitioning to modern systems.

“This early investment left the industry with a massive amount of valuable intellectual capital codified in legacy systems,” the report, authored Celent Senior Analyst Mike Fitzgerald, states. “Few have the luxury of starting over, and there are very few greenfield opportunities that allow a “start from scratch” approach.”

Yet, carriers realize that this abundance of legacy code is inflexible and costly to maintain, and that it has large implications for their business. Thus, companies have begun gradually converting to modern systems.

The report, which queried 30 insurance system professionals, charts a good deal of progress. For example, while the 73% to 27% split between legacy and modern systems five years ago, currently the balance is 52% legacy and 48% modern. What’s more, the report estimates that the split will be 61% to 39% in favor of modern systems five years from now.

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