In today’s rapidly evolving insurance landscape, digitalisation is no longer optional – it’s imperative. Insurers are grappling with the challenges posed by inflexible legacy systems, heightened customer expectations, and stringent compliance demands.

A recent webinar hosted by Insurance Post in association with Charles Taylor InsureTech brought together industry experts to discuss effective strategies for digital transformation. Here are the key insights shared during the webinar.

Panellists:

Sergio Alejandro Cadiz, Assistant manager of architecture, Zurich

Andrew Bond, EMEA CTO & specialist leader, Oracle

Gonzalo Geijo, Chief commercial officer, Charles Taylor InsureTech

Scott McGee, News editor, Insurance Post

Vikas Sharma, Director, Charles Taylor InsureTech

Challenges of legacy systems

During the webinar, Gonzalo Geijo, chief commercial officer at Charles Taylor InsureTech, highlighted that 74% of insurance companies still rely on legacy systems, which are expensive to maintain, consuming up to 70% of IT budgets. He stated, “Legacy systems are at the heart of business operations, but their outdated nature and inflexibility make it increasingly difficult for companies to remain competitive.”

One significant challenge posed by legacy systems is their lack of agility. Updating or customising these platforms to launch new products can take months or even years. Sergio Alejandro Cadiz, assistant manager of architecture at Zurich, highlighted the struggles his company faced: “When you need to change even a small element, like a data field, in a legacy system, it can involve rebuilding thousands of programs. This makes launching new products an extremely time-consuming process.”

"Legacy systems are at the heart of business operations, but their outdated nature and inflexibility make it increasingly difficult for companies to remain competitive."

Another major issue is scalability, as legacy platforms struggle to keep up with evolving customer demands and increased workloads. The transition to cloud technology further complicates the situation.  Cadiz noted that moving legacy systems to the cloud involves significant challenges, requiring additional layers to integrate older hardware and software with modern platforms. Additionally, these systems create difficulties for IT teams, many of whom want to work with newer technologies but find their skills tied to outdated frameworks.

Modernisation strategies

The webinar highlighted a clear path forward for insurers looking to modernise: adopt incremental strategies that deliver immediate value while minimising disruption. A phased approach, such as implementing middle layers to sit on top of legacy systems, was identified as a critical success factor.  

Modernisation often involves abstracting core systems with middle layers, which allows insurers to innovate and deliver value without risking the entire infrastructure. As Geijo explained, Middle layers accelerate time-to-market and reduce reliance on legacy systems, creating a smoother modernisations journey.”

Cadiz described this approach as transformational for Zurich. By leveraging a middle-layer platform, the company significantly reduced the time-to-market for new products – from several months to just two weeks. This agile framework allowed Zurich to launch and test new offerings quickly, bringing them to market through APIs and digital channels while leaving the core legacy system untouched.

Cloud technology also plays a pivotal role in modernisation efforts. Various tools were highlighted for their ability to enable microservices architecture, improving scalability and efficiency. As Andrew Bond, CTO at Oracle EMEA, explained, “The cloud combines the agility businesses need with the high availability and security expected of legacy systems, ensuring confidence in modernisation projects.”

Role of artificial intelligence

Artificial intelligence is revolutionising the insurance industry by streamlining operations and enhancing customer experiences. During the webinar, panellists discussed the diverse applications of AI, from document processing and claims management to fraud detection and customer engagement.  

Bond characterised AI’s potential as surprisingly pragmatic, pointing out that it can address mundane but critical tasks quickly. “Pre-trained models can automate document understanding or flag suspicious patterns in claims, reducing manual effort and increasing efficiency,” he said.

Vikas Sharma, director, Charles Taylor InsureTech further elaborated on the transformative potential of AI within platforms, particularly its ability to improve both efficiency and customer outcomes. He noted that tools like Fraud Keeper enable insurers to deliver tailored solutions with speed and accuracy.

AI is making a significant impact in the area of fraud detection. Machine learning algorithms analyse data for anomalies, identifying fraudulent claims more effectively than traditional methods. Panellists also emphasised the importance of embedding AI into platforms to ensure real-time fraud detection and mitigation.  

While AI offers enormous potential, participants acknowledged that adoption must be approached carefully, with a strong focus on data privacy, regulatory compliance and security.

Generative AI is also transforming the way insurers interact with customers. These models can process natural language inputs, enabling policyholders to query details or customise their coverage through conversational interfaces. This capability enhances the customer experience while driving personalisation.

Customer-centric modernisation

One of the central themes of the webinar was the importance of putting customers at the heart of modernisation efforts. Panellists emphasised that aligning technology investments with customer needs is key to achieving tangible business outcomes.  

Gonzalo Geijo explained, “The most effective modernisation strategies are those that improve customer experiences, whether through faster service, smoother claims processes, or more relevant products.”

Cadiz highlighted Zurich’s success story as evidence of the value of customer-focused transformation. By implementing a middle-layer platform, the company enabled faster product launches, improving its ability to meet customer demands. This agility was reflected in increased customer satisfaction, with improved Net Promoter Scores serving as a clear indicator of success.

Panellists also discussed the role of APIs and digital channels in enhancing customer engagement. By decoupling front-end services from legacy systems, insurers can quickly deliver new products and services, creating a more responsive customer experience.  

Cadiz highlighted the ability to launch minimum viable products as a key benefit: “We can test a product quickly, gauge customer feedback, and pivot if necessary – all without extensive development cycles.”

Modernisation also allows insurers to better serve their distribution channels, including brokers and affinity partners. By offering configurable, API-driven solutions, insurers can expand their reach while providing partners with the tools they need to succeed.

Building executive buy-in

Securing executive support is often a critical challenge in modernisation projects. As they can be resource-intensive, demonstrating clear ROI and tangible benefits is essential.  

One effective approach discussed in the webinar was starting small with proof-of-concept projects that deliver measurable results. “Prove value on a smaller scale, and you’ll gain the trust needed to expand your efforts,” said Geijo.

Panellists emphasised the importance of framing modernisation initiatives around customer value and business outcomes. For example, faster time-to-market, increased sales, and improved customer satisfaction are metrics that resonate with executives.  

Bond highlighted the need to avoid “building a new legacy” by ensuring new technologies are future-proofed through features like autonomous updates and self-patching.

Vendor collaboration is essential for gaining executive buy-in and ensuring the success of modernisation projects. By working closely with technology providers, insurers can access the expertise and support necessary to mitigate risks and achieve successful outcomes.  

"Prove value on a smaller scale, and you’ll gain the trust needed to expand your efforts."

As Geijo emphasised, vendors are critical in this process, helping clients through initiatives like proof-of-concept and demonstrating the viability of modernisation efforts.

Ultimately, the webinar’s panellists encouraged insurers to prioritise initiatives that deliver visible results for both the business and its customers. This approach not only builds confidence in modernisation efforts but also lays the foundation for sustained investment and growth.

Conclusion

The webinar emphasised the pressing need for insurers to modernise their systems to remain competitive in a rapidly evolving market.  While legacy systems continue to pose significant challenges, the strategies discussed – such as implementing middle-layer platforms, leveraging cloud technologies, and adopting AI – offer clear pathways to success.

By focusing on customer-centric outcomes and demonstrating tangible benefits through proof-of-concept projects, insurers can gain executive buy-in and build momentum for broader transformation.

As Zurich’s experience demonstrated, modernisation is not only about technology. It is about enabling agility, enhancing customer experiences and driving business growth.  

With the right approach and partnerships, insurers can confidently navigate their transformation journeys and position themselves for long-term success