This blog entry is the first of a two-part series.

Insurance modernization doesn’t matter? Most people in the industry would hotly disagree.   

Over the last 15 years I’ve interacted in one way or another with dozens of insurance carriers of all varieties. Virtually all of them have been, or are on, the modernization journey; many of them at least a few times.   

Analysts, vendors, consultants and motivational keynote speakers at industry events — all of these people frequently exhort everyone to modernize: Modernize or die is their rallying cry. Growth, speed to market, product and service innovation and operational efficiencies are the promises.   

It’s as if a modern day Pied Piper of Hamelin was playing some mystical tune that’s luring everyone in a trance-march toward modernization. Armies of people have no doubt slogged hard. Insurers have bought. Insurers have built. Insurers have executed onshore, offshore, near shore and every hybrid in between.   

There are special workshops held to teach CIOs how to sell modernization to the CEO and the board. There are events, online forums and probably even therapy sessions to exchange experiences — I’ll tell you about mine, if you’ll tell me about yours. Hundreds of millions — perhaps billions of dollars — have been spent.   

Yet, I’d be hard-pressed to convincingly name those that have truly realized the modernization promise or its benefits in a quantifiable sense. I can’t think of an insurance company that has failed or gone out of business for lack of modernization. I can’t find statistics of carriers that have modernized and, as a result, “stolen” sizeable market share from those that haven’t.   

Also see 3 Trends in Legacy Modernization

Consumers aren’t impacted much, or if they are, their marketplace behavior doesn’t seem to reflect that. How serious is the service inconvenience when you have to interact only three or four times a year at most with your carrier? True, I couldn’t pull up my proof-of-insurance on my mobile recently while getting a loaner from my Acura dealer. But my agent faxed it over in a minute (apparently a few of those machines are still around) and I got on with it.   

Unlike the consumer electronics industry that is constantly rolling out compelling new products (drones are now in), the insurance industry hasn’t introduced an innovative insurance product or coverage that I can recall telling myself I had to have. And I haven’t personally come across huge price differentials being offered by the modernized haves versus the have-nots. (They may exist, but I haven’t seen them.) Pricing appears relatively uniform, much like the airline industry.   

Based on the available evidence then, shall we conclude that insurance modernization doesn’t really matter? Is this all just another over-hyped hype cycle that solutions providers and insurers alike feel like they shouldn’t miss out on?


Modernization definitely matters, although maybe not in the short-term. It may not matter for those of us who are Baby Boomers or even Gen-Xers, although this may be argued. But for insurance carriers that have been around a while and wish to be reckoned with for the coming decades and longer, it absolutely does matter. In Part II, I’ll discuss why.

Ram Sundaram is a principal of X by 2, a technology consulting firm that specializes in IT transformation projects for the insurance industry.

Readers are encouraged to respond to Ram using the “Add Your Comments” box below. He can also be reached at

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