Insurers Leave Legacy Behind
New Celent report says insurers are making slow, but
steady progress remaking their core systems.
What percentage of your
core systems is running on
hardware that is:
WHILE THE MAINFRAME ERA MAY SEEM REMOTE TO
the public at large, things are different in the insurance industry. Mainframes and other legacy hardware and software continue to persist at insurance companies.
A new report, “Reality-Checking the Evolution in Core Systems: Responding to the Real-World Technology Environment
of Insurers,” from Boston-based Celent, assesses the industry’s
progress in transitioning to modern systems.
“This early investment left the industry with a massive
amount of valuable intellectual capital codified in legacy sys-
tems,” the report, authored Celent Senior Analyst Mike Fitzger-
ald, states. “Few have the luxury of starting over, and there are
very few greenfield opportunities that allow a “start from
Yet, carriers realize that this abundance of legacy code is
inflexible, costly to maintain and has large implications for
their business. Thus, companies have begun gradually convert-
ing to modern systems.
For example, five years ago, the split between legacy and
modern systems was 73% to 27% in favor of legacy. Currently,
the balance is 52% legacy and 48% modern. Looking forward,
the report estimates that five years from now the split will be
61% to 39% in favor of modern systems.
Another interesting was the split between the age of the software
and the age of the hardware. While legacy languages still dominate,
(53% of core systems were written in legacy languages such as COBOL) legacy hardware is being retired. Only 7% of respondents said
they were running core applications on hardware more than
10 years old. INN
For core systems,
what is your
5 Years Ago
5 Years Old
5 years From Now