Reviving the Insurance Core Systems Business Case
Core system modernization business plans still a concern to insurers, but progress is being made.
In a new report, Reviving the Insurance Core Systems Business Case, Celent continues its research into the topic of legacy system modernization. The report expands our look at the business case behind every system modernization project, summarizing results of a recent Celent survey and follow-up interviews. It also offers a frank assessment of progress to date.
The report finds that there are disconnects between vendors’ and insurers’ views of modernization projects, their inherent challenges, likelihood of success, and benefit areas. It also finds that respondents identify culture change as a major roadblock to systems modernization success.
“Specific technologies have definite 'fashion' cycles. Something that is in today can be out tomorrow, or maybe the day after,” says Craig Weber, Senior Vice President of Celent's Insurance Group and coauthor of the report. “But legacy modernization has been and will continue to be high on the agenda for at least the next 10 years. As an industry, we're making progress addressing legacy issues, but there's lot of work to be done.”
“Insurers should think of core system replacement as a culture shift, not simply a new technology. Modern core systems force insurers to focus on business problems and rethink traditional processes, roles, and business goals. It’s almost like going back to the days of process reengineering,” adds Karen Monks, Analyst with Celent’s Insurance Group and coauthor of the report. “This level of change requires buy-in both across and up and down the organization.”
This report offers a framework for tackling the issues surrounding unrealized business cases for system modernization projects.
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].
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Table of Contents
About the Survey
Breaking Down the Business Case
Hard Vs. Soft Savings
The Philosophical Divide
Overcoming the Weight of History
A New Framework
Making It Happen
Leveraging Celent’s Expertise
Support for Financial Institutions
Support for Vendors
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