Choosing a Legacy Modernization Strategy

by Donald Light, April 14, 2015
Industry Trends


Modernizing a legacy system is one of the largest IT investments an insurer will make.  How does an insurer choose the best way to do this?

This report describes the following four legacy modernization strategies:

  1. Replace with a commercial off the shelf (COTS) package.
  2. Replace with a completely rewritten system.
  3. Wrap and extend using rules, BPM, document management, portals, etc.
  4. Continuous improvement: annual planned improvements. 

The report also provides a sequential set of knockout questions which insurers should ask and then answer as a first step in choosing a strategy.

“Celent recommends that other insurers follow a more sequential analysis: understanding their own kinds and levels of pain and benefits, answering the knockout questions, and analyzing the remaining strategic options in more detail,” says Donald Light, research director with Celent’s Insurance practice and author of the report.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

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Table of Contents

Executive Summary



Key Research Questions




What Are the Benefits of Modernizing Legacy Systems?


What Are the Four Basic Legacy Modernization Strategies?


How Does an Insurer Choose a Legacy Modernization Strategy?




Leveraging Celent’s Expertise



Support for Financial Institutions



Support for Vendors


Related Celent Research


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