Part I: Insurers Focus on Legacy Modernization

A few weeks ago I had the opportunity to spend the day with Gartner’s leading insurance analyst, Kimberly Harris-Ferrante, at our campus in Westlake. Throughout the day we discussed the current technology trends facing insurers in 2010 and one of the top themes from 2009 resurfaced – legacy modernization.

In search of efficiency, agility and the ability to innovate, insurers are quickly realizing their legacy systems often stand in the way of these goals. Still, several insurers are operating with legacy applications as their backbone. However, their successes are limited at best and at worst a liability for the organization. I see these as the top 5 problems with legacy systems:

  1. Limited functionality limits innovation and growth.
  2. Maintenance and staffing costs are high and growing.
  3. Purely data-driven architecture prohibits access to business content.
  4. Many are band-aided together and guarantee business silos.
  5. Compliance and regulatory concerns are expanding.

While it is clear that something needs to be done, the options available to solve the problem can be overwhelming. In this series of blog posts we’ll discuss the business and technical pains insurers face as a result of aging legacy systems, the options for battling the pains and will advocate ECM as a viable solution. Faster and cheaper than replacing legacy systems and easier to use and deploy than other alternatives, ECM facilitates becoming a process-based organization. Process-based insurance organizations are more flexible, agile and responsive and, therefore, more successful.

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