| Contact Us

November 05 2013 | Deb Smallwood

The age old conversation about legacy modernization is at last being translated into action. Insurers of all sizes are pushing forward and strategically planning for this change. While it is a tremendous undertaking as the effort extends well beyond just the core system technology, insurers are becoming clearer in their understanding that in order to optimize their business, a modernized foundation is absolutely critical.

Modernization actually takes place on two levels. The first is the legacy core system itself. The second is the enterprise architecture in which legacy core systems operate. In reality, it is an ongoing process. SMA has observed that many insurers are taking a phased approach to modernization that is aligned to the organization’s resource capacity and the level of change that the organization can absorb.

SMA research shows that for many insurers, modernization will be primarily focused on core systems, as well as a number of key capability areas such as user experience, underwriting, data, and analytics, along with customer communications management. Advances in solutions and architectures are paving the way for an orchestrated approach to modernization tied to strategic initiatives – aligning people, process, and technology along the way.

Insurers place highest priorities on addressing the critical areas that hinder business progress. The areas vary, and the emphasis is different for each insurer. For some, the challenge involves the ability to service distribution channels; these insurers are focusing on user experience. For others, it is the inability to respond quickly to rate and rule changes, and they are focused on core rating capabilities. Still others face challenges in rolling out new products and programs and bringing them to market, so they are concentrating on core systems and product configuration.

As modern systems are being implemented, insurers have an eye on the upgrade path for all technology. More now than ever before, there is a commitment to remain current, but above all, the key is to approach modernization in a strategic and planned manner. It is this organized and orchestrated approach that will deliver benefits both today and in the future, setting the stage for optimizing every aspect of the business and establishing an effective base for real transformation and innovation.