In With The New

New offerings based on advanced technologies, as well as intensifying competitive pressures, make a strong argument for P&C legacy systems replacement. And while the case for life/health legacy replacement is not as strong, it is growing more persuasive with time.

Enthusiasm for new technology often has cost insurance companies dearly, and not the least with regard to the question of legacy system replacement. The saying "once bitten, twice shy" applies to many carriers, and still others have learned from their colleagues' mistakes. Those mistakes also dampened the tech-boosting tendencies of many industry observers, who opined that replacement was too risky - perhaps a little late for those that ran the risks in advance of the good advice. But the tide may be turning.

As recently as 18 months ago, BearingPoint (New York) advised P&C carriers against the risks of legacy replacement, but the consultancy has changed its tune and collaborated with policy admin vendor ISO Insurance Technology Solutions (ISO-ITS; Nashua, N.H.) on the paper, "Creating a Responsive Rating and Policy Platform for the 21st Century Property/Casualty Company," which makes the case that the P&C insurer of the future needs the functionality that newer systems afford. The paper acknowledges that, "Insurers have long feared the idea of replacing core policy administration systems," but stresses that "companies must consider legacy replacement if they are to address the realities of the 21st century."

Those realities, according to the BearingPoint/ISO paper, include the need for carriers to be more agile in their product maintenance and development to meet market demands; consolidate mission-critical systems such as rating and rules engines; automate and standardize processes and procedures; improve ease of doing business for distributors; and take advantage of advances in technology integration capability.

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio

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