A new survey of P/C and group life carriers revealed that more than 50 percent cite legacy systems as the top core system challenge, followed by integration and scalability/flexibility issues.
Insurance Global Operations (IGO), a solution provider of core processing systems for the P/C and life insurance markets, on Wednesday announced the results of its industry research focused on core insurance processing systems in the U.S.
Two hundred P/C and group life carriers were surveyed via phone interviews by an independent third-party market research organization. Questions focused on satisfaction levels, ages and number of existing claims and policy administration systems, and challenges as well as planned initiatives.
The research results show continued heavy reliance on in-house developed systems despite investments in core legacy replacement initiatives made by carriers over the past decade. Group life carriers reported that more than 75 percent of core systems were in-house or homegrown, compared to P/C carriers at more than 55 percent.
Other survey highlights include:
- 42 percent of the carriers rated satisfaction with their core systems a “C” or below, based on an A to F grading scale.
- 63 percent have at least one core system that is 11 years old, with 18 percent reporting systems older than 25 years.
- More than 50 percent of the carriers said they had budgeted initiatives to replace or augment their core systems in the next 12-18 months, including 11 companies that planned new end-to-end core processing systems.
Didier Lamour, IGO’s U.S. CEO, commented: “As satisfaction levels with legacy systems continue to decline and the industry confidence continues to grow relative to new and modern core processing systems, we expect to see an accelerated shift from the old to the new. No one ever said replacing legacy core systems was an easy effort, but with each success comes new lessons and new opportunities. We look forward to IGO being a part of many of those new system and legacy replacement success stories.”
Source: Insurance Global Operations (IGO)