When I started working at Celent back in November 2007, one of the research topic we were covering extensively was the legacy system modernization or replacement topic. Nowadays, legacy modernization remains a topic that has still a high importance in insurance CIOs’ agenda across the globe. Indeed based on our 2017 insurance CIO survey and out of 150 responses received across the globe, 57% of insurers are currently working on legacy modernization system projects. Another 10% are in the planning process and 11% will begin new legacy transformation projects next year.
It is therefore important for us to help our insurance customers understand what embarking in a core system replacement or modernization project means. While the benefits of modernizing core legacy systems are clear and compelling (gaining a competitive advantage — or achieving competitive parity, reducing operational and IT costs, making better underwriting and claims decisions, seizing analytic advantages when information and processes become completely digital), there are a lot of factors at play from the definition of the new system requirements, the approach to be chosen between the development of a new system and the purchase of a package or a best-of-breed component, to the selection of the optimal partners. Another crucial part of a legacy system replacement is the implementation of the new system as it can represent a major challenge notably in terms of project management, customization effort and migration. Implementations are particularly challenging when they involve multiple vendors and integrations.
To help our insurance customers figure out all the factors at play, every year we describe some cases in the frame of our Model Insurer program. This year we will be presenting the three cases we have received among more than 20 submissions in the frame of our Innovation & Insight Day event, which will take place in Boston on the 4th of April 2017. In addition to presenting the legacy modernization category award winners, we will also explain why they have decided to replace their legacy systems and what opportunities have been identified. We will also describe the implementation effort and draw out lessons learned. For those of you who will not be able to make it in person, we will publish a report profiling the three winners but I hope to meet you in big number at our event in Boston.