Executive Summary: ISG Provider Lens™ Insurance Platform Solutions - North America 2024

The individual quadrant reports are available at:

ISG Provider Lens™ Insurance Platform Solutions - Property and Casualty Insurance Platform Solutions - North America 2024

ISG Provider Lens™ Insurance Platform Solutions - Life and Retirement Insurance Platform Solutions - North America 2024

Carriers should re-evaluate their processes and core systems to enhance policyholders’ experiences.

Today’s insurance industry is facing a tumultuous environment, which requires a paradigm shift in rating, quote, underwriting and bind, claims processing and settlement and policy servicing methodologies and practices. In order to achieve this, it is necessary to move away from legacy models by upgrading core systems and deploying advanced technologies that drive better outcomes and transparency. This will require a fundamental rethinking of the industry’s traditional insurance practices and processes and a commitment to modernizing systems and processes that have been in place for decades. By adopting these new approaches, insurers can better navigate the changing landscape, improve their risk management, acquire potential customers easily and cater to the existing policyholders’ fast-evolving and rapidly changing needs.

The presence of obsolete core systems infrastructure that has persisted for 10, 20 or 30 years continues to hinder many insurers from adopting a forward-looking stance and cultivating more astute business models. A decisive transition to contemporary infrastructure and SaaS geared toward the future will establish the foundations for insurers to unlock their full potential.

Using antiquated legacy core systems poses significant risks. Like a house with a crumbling foundation, the reliance on outdated core systems certainly will lead to collapse. Even when legacy infrastructures are modernized, they still rely on obsolete setups and methods, which inherently restricts how insurers can integrate with today’s and future technological frameworks. The latter may be treated as an interim solution option. At the same time, the modern core infrastructure is gradually getting operationalized in the insurers’ business environment or may be allowed to co-exist as a multi-core system landscape if, at all, the legacy business and in-force insurance policies are too risky to migrate to the new core system.

Outdated core systems struggle to integrate with digital solutions without extensive hard coding and 21st-century programs do not perform optimally when supported by systems designed in the 20th century.

Modern legacy systems’ integration limitations hinder core systems from accessing vital data from various sources or collaborating effectively with other solutions in a seamless manner that customers expect from online data operations. Silos complicate back-end carrier operations and cause customer-facing issues, prompting customers to shop elsewhere due to their significance. Lastly, old infrastructure complicates cloud migration. While applications built for legacy technology can be lifted-and shifted to the cloud, they cannot achieve the same performance level as those built with truly cloud-native architecture.

Carriers must deliver insurance experiences that cater to the expectations of policyholders. This insurance experience can be achieved by providing prompt and efficient services and using technology to enhance the experience. Carriers must recognize that the insurance industry is evolving and policyholders are becoming increasingly discerning. As such, carriers must remain vigilant and keep up with the latest trends in customer service and technology to provide exceptional experiences that meet the needs of policyholders.

In the contemporary insurance landscape, progressive carriers require a core system that is adaptable and resilient. They also require corresponding technological infrastructure capable of accommodating future advancements in the industry. Such a system must be customizable to meet the carrier’s unique needs, enabling it to remain competitive in an ever-changing market. The importance of a modern and robust core system cannot be overstated, as the system serves as the backbone of the carrier’s operations and is critical to delivering quality services to policyholders. In light of this, carriers must invest in the latest technologies and remain at the forefront of industry developments to maintain a competitive edge.

Implementing a new core system in the insurance industry is a complex undertaking that demands  meticulous planning and execution. Despite the inherent challenges, core system providers now offer innovative approaches that, when coupled with the guidance of their trusted partners, enable insurers to develop an implementation strategy with confidence and execute it at a pace that aligns with their business needs. Through this collaborative effort, insurers can rest assured that any unforeseen issues will not impede the successful deployment of cutting-edge insurance technology from modern core system providers.

Disparate legacy systems catering to various business units or product lines often hinder insurance  companies from enhancing operational efficiency and process effectiveness. Even if Insurtech tools are deployed on top of these outdated core systems, they still fail to mitigate the inefficiencies and procedural delays that can arise from using such systems. Therefore, insurance carriers must adopt hyperefficient technologies, such as modern core systems, to bolster their operational capabilities and streamline their processes. By doing so, they can effectively overcome the challenges of improving their operational efficiency and reap the benefits of enhanced process effectiveness.

Contemporary core systems providers facilitate insurance product innovation by deploying new API-centric products, thus obliterating any incompatibilities that may arise and facilitating streamlined digital CX. This modern approach ensures a future-proofed core platform that enables effortless product deployment, thereby enhancing the overall efficiency and effectiveness of the system.

Modern core systems catalyze expediting the time-to-market and boosting competition for insurance carriers. Insurance carriers cannot afford to be complacent because of the urgent demands of persistency metrics, annual sales and renewal cycles and the increasing competition in emerging markets. Swiftly pushing new products, critical updates and innovative business approaches through development without compromising quality is essential and modern core systems can facilitate this process.

Operationalizing modern core systems can enable insurance carriers to enhance their operational efficiency, augment their responsiveness to policyholders’ needs and streamline their internal processes. Using these systems, insurance carriers can swiftly develop and deploy new products, critical updates, or pioneering business models consistent with the market’s dynamic and evolving requirements. Using modern core systems can thus empower insurance carriers to maintain their competitive edge and thrive in today’s fast-paced, everchanging and predictably more uncertain business environment.

The modern core system integrated or with an add-on feature of LLM-based GenAI tool will enable insurers to generate operational efficiencies and deliver productivity gains by improving turnaround time across the policy life cycle. In the near future, the real and substantial impact of AI would emerge once AI gets integrated into the core workflows and functionalities of the insurance system. Optimal AI integration will happen once it seamlessly becomes an inherent component of core systems, with business/ operational users of core systems unaware of its AI nature. This broader operationalization of AI usage across the core insurance operations across the customer journeys will deliver impactful outcomes and may inevitably pose more regulatory disclosure challenges for insurance entities.

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