3 Trends in Legacy Modernization
1. Core Policy Administration: Replacement remains top of the pile: According to Celent, about 42 percent of the submissions they received in the legacy modernization category were focused on delivering new P&C core policy administration systems — mainly in support of improving agility and efficiency. “Rip and replace” continues to be the dominant strategy for P&C insurers. Additionally, about 19 percent of the legacy modernization submissions were focused on delivering new life core policy administration systems, mainly in support of new propositions. Improved channel management and support for new distribution also proved to be a strong theme.
Finalist: Foresters: Foresters performed a complete legacy transformation of its back office, including its policy administration and underwriting systems. However, all of this was preceded by imaging and implementation of its enterprise service bus.
2. Claims transformation programs continue to deliver strong benefits: Celent found that about 19 percent of this year’s legacy modernization submissions were focused on delivering new claims platforms. The submitters’ initiatives ranged from the complex rationalization, such as delivering a capability across multiple brands and insurance entities, through to delivery of niche features, such as claims self service portal and mobile technologies.
Finalist: Aegon UK: The first of Celent's finalists this year, Aegon UK launched Aegon Retirement Choices, the first platform in the UK to combine an adviser platform with a workplace savings platform.
3. Underwriting is starting to look more interesting: Celent notes that from this year’s submissions, underwriting initiatives have spanned from simplification initiatives targeted at improving control and efficiency to niche delivery of key information/decisions at point of decision to agent portals. In top-end commercial business, the word “global” is becoming more than a label. Celent says that some ambitious insurers are looking to implement initiatives across regions.
Finalist: ICW Group: Celent is considering ICW Group for having implemented an underwriting workstation and business analyst workstation with an agent portal. Some of the key features of the portal include the use of web service data and predictive analytics, as well as real time collaboration between agents and the insurer during the sales process.
Finalist: Saxon Insurance: According to Celent, a new policy administration solution enabled SaxonMG to modernize the way automobile insurance products were offered and sold in the Cayman Islands. Additionally, the new system allowed for new auto insurance features, including packaged offerings, term options and direct online sales, to be used on the Caribbean island.
Coming up next: Winners of the Model Insurer awards will be announced at Celent's 2014 Innovation & Insight Day in April. Over the next few weeks, INN and Celent will share lessons learned from all five categories of Celent's Model Insurer award program. See 3 Things We Now Know About Success in Digital
Looking at the submissions in the legacy modernization category of Celent's Model Insurer awards program, it's apparent that insurers must not just modernize, but completely transform their internal systems and the ways in which they interact with a vast web of customers, counterparties and regulators. Click through to see how this year's four finalists have transformed their ecosystems.