Tracking the Progress in Core Systems Replacement: Global Life Edition

by Catherine Stagg-Macey,  Jamie Macgregor, January 17, 2013
Industry Trends
Global

Abstract

Two years ago, one in three insurers reported being well into the program of change. Today, that number has doubled, with 50% of life/health insurers making significant inroads into their legacy modernisation programs.

Celent tracks the core systems vendor market on an annual basis in all geographies. These reports provide tremendous detail into the features and functions of these engines, as well as vendors’ implementation capabilities. This software market has matured over recent years, and there are more examples of successful implementations of core packages. Celent’s deal trends reports for Europe and North America continue to show positive trends.

In Tracking the Progress in Core Systems Replacement: Global Life Edition, Celent analyses data from 91 life and health insurers. The report provides an update on current and planned experiences with core systems. The report also expands on feedback around the current state of the IT environment, future plans, views on data migration, modernisation preferences, and vendor roles.

“Flexibility is missing from the older core systems, and this places restrictions on what the business is able to execute,” says Catherine Stagg-Macey, Senior Vice President with Celent’s Insurance Group and author of the report. “We have arrived at a point where the majority of insurers have realized that this is no longer good enough to stay in business.”

This report takes a look at the issue of core system replacement from the perspective of the insurers and forms part of an ongoing series (published every two years) exploring the progress insurers are making in this area. This report provides a life/health insurer perspective. There is a companion edition for P&C/general insurance.

This 23-page report contains eleven figures and one table.

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

1

Report Overview

3

 

About the Survey

3

Measuring the Impact

5

 

Two Sides of the Same Problem

5

The Business Case and True Costs of Core Systems Replacements

8

 

In Many Cases, a Valuable Tool

8

 

True Costs of Core Replacement Projects

9

State of Play

12

 

Persistent Project Challenges

12

A Case for Partnerships

15

Final Thoughts

17

Leveraging Celent’s Expertise

18

 

Support for Financial Institutions

18

 

Support for Vendors

18

Related Celent Research

19

Sign in to download reports and access personalized information