Insurers’ core information technology (IT) systems, including mainframe technology, are aging rapidly, causing significant problems. Timeworn legacy systems require increased maintenance, which drives up costs. Older systems cause process and decision-making friction, degrading business agility, which can easily degenerate into strategic risks. To correct this problem, insurers need to modernize their core systems.
Many firms have put in place manual processes, adding resources and front-end technology to work around the problems caused by their creaking legacy systems rather than push ahead with expensive and disruptive modernization programs. But short-term fixes only mask the broader long-term issues, while the patchwork of old and new technology is preventing firms from innovating and becoming more agile, efficient and customer-centric companies, risking the loss of market share.