Blog

2 Techniques that Ease the Pain of Replacing a Legacy Claims System

Yasir Hussain
Insurance Experts' Forum, October 11, 2012

At the beginning of a claims system modernization project, all parties, business and IT, are eager to start working with a modern system that is flexible and agile enough to meet changing business needs. Everybody is excited.

Now comes the hard part: figuring out how you’re going to hook this new system into the existing legacy-system landscape.

Often, the legacy system has been around for 20 to 30 years. And with that comes massive integration challenges—the biggest undertaking in replacing a legacy system. Imagine a 30-year-old circuit board with wires all over the place. Now you have to tear out the old board and reconnect all those wires perfectly.

That’s what replacing a legacy claims system looks like from an integration perspective. Each “wire” goes to a different internal or external system. It’s the architect’s job to take a modern system and integrate it back into 30 years of convoluted integrations with other legacy systems.


Assess your transition strategy

Should you replace the legacy claims system as a whole, or line by line, or function by function? If you work for a small carrier with a few lines, you might be able to make a clean break and replace the entire system at once. However, if you’re with a large carrier with multiple lines and products in many states, it’s too risky to replace the claims system in one fell swoop. You’ll have to run both the legacy and modern systems in parallel.

How do you integrate a modern system while maintaining the legacy system and without impacting the entire IT landscape? There are several techniques to accomplish this. It takes a multi-pronged integration strategy. If your landscape is filled with other legacy systems, you have to create a legacy bridging strategy.


Two bridging techniques

1. Borrowing from service-oriented architecture concepts and applying them to the legacy mainframe world, you can start by creating a combined claims legacy façade. The legacy façade acts like a legacy system, but under the cover it hides the necessary routing, switching, transformation and translation required to communicate to the legacy system as well as to the modern system.

The introduction of a legacy facade distributes the work of legacy integrations to other systems. However, it also encapsulates the logic and gives the claims implementation team control over when and how the legacy system will be retired. Set up a deadline for other legacy systems to use the façade and you can reduce the legacy integration burden by half, while encapsulating the complexity of your legacy system retirement strategy.

2. Backfill the data from your modern system. Most legacy systems produce an abundance of batch file extracts for other systems and partners. Replacing or merging these file extracts with data from the modern claim system is not an easy task.

Thankfully, there is a shortcut. Legacy batch programs that produce files have been developed over 30 years, burying an enormous amount of programming logic. However, the underlying data model is fairly stable and well understood. Instead of trying to replicate the programming logic, you can choose to backfill the data from your modern system into the legacy system. Let the legacy system continue to produce batch file extracts, and you will get some breathing room to replace this logic in your modern system over time.

Replacing a claims system is a huge challenge, but by using a legacy façade and backfilling data, you’ll ease some of the pain.

Yasir Hussain is a senior architect with X by 2, a technology firm in Farmington Hills, Mich., that specializes in software and data architecture and transformation projects for the insurance industry.

Readers are encouraged to respond to Yasir using the “Add Your Comments” box below. He can also be reached at yhussain@xby2.com.

This blog was exclusively written for Insurance Networking News. It may not be reposted or reused without permission from Insurance Networking News.

The opinions of bloggers on www.insurancenetworking.com do not necessarily reflect those of Insurance Networking News.

Comments (0)

Be the first to comment on this post using the section below.

Add Your Comments...

Already Registered?

If you have already registered to Insurance Networking News, please use the form below to login. When completed you will immeditely be directed to post a comment.

Forgot your password?

Not Registered?

You must be registered to post a comment. Click here to register.

Blog Archive

Driverless Cars: Unintended Consequences for Insurers to Watch

When bad or unexpected or unusual things happen, the computer gives up control and hands it back to the now woefully unprepared occupant.

Why Insurers are Leading on Data and Analytics

A State Street survey finds insurance companies are more likely to be further along in becoming “data innovators” than their financial services counterparts.

The Other Auto Insurance Telematics Shoe Drops

Progressive's decision to charge Snapshot drivers more if their driving data indicates higher risk has started the industry down a road of data-driven adverse selection.

Core Transformation – Configuring in the Rain

The whole point of core transformation is that changes at the micro level can be used as a stimulus for changes at the macro level.

6 Ways to Develop a Productive IT-Business Dialog

Relationship management 101 for keeping IT and business on the same page.

Unified Digital Strategy: Succeeding in the Digital Revolution

A unified digital strategy recognizes that all business strategies and technologies touch the customer in some way and that a one-size-fits-all channel model is obsolete.