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Giving your core insurance systems a second life.

Improving your Policy Admin, Claim Admin, Billing, Rating systems with cloud functionality.

Back in the days, we are talking late 1960’s, early 1970’s, when CRM and ERP were viewed as interesting new concepts, process of standardisation and automation were the initial steps insurers adopted as a way to improve efficiency and reduce human error.

During a decade when man had landed on the moon using technology that was infinitely slower than the first iPhone (released in 2007), the average mainframe computer looked like an IBM System/370 model 145 having 500KB of RAM, 233MB of hard drive, and a CPU running at 2.5MHz. Yes, MEGA Hertz, not Giga Hertz, Kilobytes of memory, not Gigabytes and megabytes of storage, not terabytes or petabytes. Those were the days.

Due to the lack of power of the systems in those days, the software built during that time needed to be extremely efficient in its use of resources and were therefore developed in a dual mode. With “on-line” operation during the day taking care of all the inputs from operators and end-users and “batch” operations during the evening/night, when the system had time to process all the inputs and get ‘ready’ for the new day.

The insurance industry recognized early on, the advantages of these large systems and so did many companies that built systems themselves. These efforts led to the emergence of commercial products and what came to be known as “the commercial policy admin systems”. Some examples are Unisys’ Unisure, Solcorp’s Ingenium (bought by EDS, bought by HP and merged into DXC), Vantage (former CSC and now owned by DXC) and many others still in use today.


Every insurer had his own requirements and local regulations that demanded many adaptations to the base commercial systems. PAS software vendors permitted the insurers to customise these systems at will, provided these customisations would all be made available to the vendor. The vendors would then enhance the base product. Creating a kind of Open-Source “Avant la Lettre” except for the lack of “Open”, i.e. in reality, more like community development.

While it was an attractive model, it was also flawed as many of the adaptations, insurers made, never ended up as part of the standard functionality for many reasons. This fact caused the customized systems to deviate more and more from the base code: where the PAS software vendors were able to sell increasingly functional systems, their customers increasingly drifted apart.

In the meantime, the IT industry developed many new concepts to improve the lack of agility of the mainframe paradigm. First, the client-server emerged, moving a lot of the server's functionality to the client and (often) creating fat clients. Then service-oriented architectures were invented followed by web services, and nowadays Cloud, Micro Services, Containers are paramount leading to an Agile architecture based on DevOps principles. The industry has moved from automating jobs via automating processes to enterprise integration. Now mankind is entering in the age of artificial intelligence to support decision processes where humans struggle to deal with the (overload of) data involved in the decision process. These developments (and potentially huge improvements) happen at an ever-increasing speed.

So, what if you still run the legacy core system that has served you for decades? It runs your entire core process and enabled you to get you where you are today, but it desperately needs enhancements, and your version has been out of support for more than 10 years. The original vendor has gone through multiple acquisitions. The current PAS software vendor want you to buy and implement a completely new PAS, which has all the latest and greatest features, without a realistic upgrade path. This means a major overhaul of your organisation, massive investment, everything changes from IT, infra, end-user experience, internal processes, everything, and, by the way, you still need to re-implement everything that made you special! It's going to take years before you are back to normal.


A legacy PAS doesn’t require a lot of functional changes at its core. What it needs is effective digital access to the legacy system’s data and services in a microservice way. It needs modernisation to increase the system's agility and flexibility, replacing hard coded logic with flexible BPM (abundantly available as a commercial product). It needs modernisation to break the batch cycle and move to real-time, on-line insurance processing. And it needs the flexibility to scale up and down as business demands (the cloud paradigm) using industry-standard cost models available from Microsoft (Azure), Amazon (AWS), and Google (GCP). And, ideally, it incrementally needs all of it, innovating each area in line with business requirements and driven by increased business value delivering results in a reasonable timeframe, not in an all or nothing approach taking years and years.

Therein enters the concept of continuous modernisation. Rather than trying to modernise everything in a do or die approach, consider the two main threads:

  1. Infrastructure modernization aimed at making the underlying IT infrastructure fit for purpose again. This process involves eliminating the legacy dependencies and replacing these with open, x86 based components, introducing agile and DevOps principles, and cloud-enabling the infrastructure in the process. This solution can be done in a big bang approach, for small to medium systems, or as an incremental approach, for very large systems of tens of thousands of MIPS, and projects should be completed in roughly a 1-year timeframe. A key requirement is functional equivalence to ensure a workable test strategy and change management with minimal risk. This also ensures minimal business disruption during the first modernisation phase.
  2. Application modernization, working off the results achieved in the previous step to identify and implement incremental business improvements in areas like digital access, BPM, CRM, AI, real-time processing, multi-channel, and digital front office, interfacing to existing and new/emerging InsurTechs, effective underwriting in minutes rather than days or weeks. The use cases are abundant.


As long as the core remains legacy centric/based, any business innovation will take too much time and cost too much, neither of which are helpful these days. Simultaneously, improving through the implementation of a new PAS neither supports incremental improvements nor delivers short term results. The most effective way forward is to set the system up for successful innovation by replacing the legacy inhibitors and high costs with an effective and fit for purpose infrastructure that enables you to innovate at your pace.

There are great examples of such innovation with the likes of VIVAT, now Athora, Aegon, Aviva, Modern Woodmen of America, and Southern Farm Bureau Life Insurance.



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Herman Eggink

Herman Eggink



Member since

07 Oct 2004



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This post is from a series of posts in the group:

Digital Insurance Trends

Customer acquisition, onboarding and engagement, underwriting and risk management, billing and claims – all these areas are being changed by the digital innovations. Digital Insurance Trends is a group for professionals who are interested in Insurance Technology, Fintechs, and Solutions Providers - as well as Global Industry Intelligence.

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