Still Seeing the Shadow: Groundhog Day for Legacy Modernisation (Life and Health Edition)

by Catherine Stagg-Macey, January 20, 2011

Abstract

Insurers are tackling the challenge of legacy systems head on. Almost half of life insurers report being well under way in their legacy modernisation projects.

Legacy IT is an intrinsic part of any established insurer, and this legacy is placing constraints on business flexibility, so the imperative of addressing this legacy comes as no surprise. In a new report, Still Seeing the Shadow: Groundhog Day for Legacy Modernisation (Life/Health Edition), Celent provides an update on the progress of life insurers in their journey of updating their legacy infrastructure and systems.

“Business agility will continue to headline most business cases,” says Catherine Stagg-Macey, Senior Analyst with Celent’s Insurance group and author of the report. “We have no doubt that early movers in this area will gain competitive advantage with their agile business processes.”

Celent maintains that it is imperative that the legacy problem is addressed. How this is done is dependent on current IT environment, business pain points, and the company's appetite for risk. The maturity of SOA and modern PAS solutions makes it more possible to tackle the challenge of legacy. And with careful deign and planning, insurers can avoid creating the next generation of legacy.

The report looks at the impact of legacy and how this can be measured. It goes on to discuss progress to date and provides an overview of emerging strategies and operational considerations being employed by insurers. The final chapter provides some thoughts on tackling this problem.

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 subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

3

Introduction

4

Impact of Legacy IT

6

Current State of Play

12

Emerging Strategies

16

Operational Considerations

21

Final Thoughts

25

Leveraging Celent’s Expertise

27

Related Celent Research

28

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