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February 08, 2013 at 09:43 AM
The vast majority of life and health insurers say the business impact of their current IT environment can be measured by an ability to create and manage new products.
Celent, a research and advisory unit of the management consulting firm Oliver Wyman, New York, published this finding in an executive summary of a new report, “Tracking the Progress in Core Systems Replacement: Global Life Edition. The report analyzes data from 90 life, health and annuity insurers, about the current state of their IT environment, future plans, views on data migration and modernization preferences and vendor roles.
When asked to describe their objectives for replacing legacy systems and how these systems have changed over two years, life and health insurers today express a greater preference than two years ago for addressing all legacy systems in some manner (e.g., patching, replacing, or wrapping. The proportion of insurers who have no plan to replace systems has also dropped to 6 percent from 14 percent two years ago.
In 2010, there report adds, the goal among life/health IT departments was to replace legacy systems where there was a strong business case (49%), and replace on a case-by-case basis (26%).
When asked how about their favored approached for modernizing their company’s IT systems, nearly 7 in 10 (69 percent) of survey respondents flag “wholesale replacement.” Wrap/extend existing systems is the second approach (41 percent), followed by outsourcing (36 percent).
