Insurers need to address legacy systems

Life insurers need to address legacy insurance systems if they are going to remain competitive and meet compliance requirements, Ovum analyst Charles Juniper has claimed.

The financial service technology expert said insurance firms need to become increasingly agile and customer-centric – and to achieve this, they will need to undertake structural change of both core insurance systems and operational processes.

“The critical role of core systems in overall operational effectiveness and the urgency with which life insurers need to respond has meant that transformation is increasingly seen as a business issue, not just an IT problem. As a consequence, business functions within life insurers, in conjunction with the IT group, are instigating and driving core system transformation initiatives.”

The analyst said that the operational impact of a core insurance system is likely to be felt for 10 years or more, so flexibility is essential.

Juniper added: “Given the long-term impact such a transformation can have on business effectiveness, the choice of platform and vendor is critically important. Life insurers therefore need to gain a detailed understanding of any potential partner’s product and service development roadmap; insurance-specific experience and capabilities; and market and business strategy.”