Why Modernize Insurance?
Current insurance customer sentiment clearly indicates a strong preference for affordable products, hassle-free experiences, and timely service delivery.
However, many insurers struggle to meet these expectations because their old systems and infrastructure hold them back.
The answer is insurance legacy software modernization.
According to Deloitte, the top priority for insurers is having a strong product strategy. An impressive 86% want to quickly launch new products and easily adjust features based on customer feedback.
Two-thirds of the responses indicated technological relevance as the second most selected business driver.
Older systems lack flexibility and are burdened by outdated technology, such as old programming languages, databases, architectures, and a shrinking pool of experienced developers.
When asked about the most crucial business driver, one in five respondents chose the ability to quickly bring products to market and grow policy volumes.
Insurance legacy system transformation is seen by industry veterans as a somewhat risky but strategic move aimed at both improving current operational efficiency as well as prospects for future expansion and driving innovation.
But key thing to remember is that each insurance company situation is different.
The bottom line? A successful modernization plan must align closely with business goals, making sure that technology upgrades support strategic objectives.
Three Major Issues Facing Legacy Insurance Software
Besides preparing for the future, insurance companies must modernize because legacy software can no longer effectively support their operations.
Even though many insurers stick with an “if it ain't broke, don't fix it” mindset, outdated systems often lead to higher costs and operational problems, eventually forcing companies to modernize.
From our experience, there are three key areas where legacy software seriously holds insurers back:
- High Operational Costs: Frequent maintenance, manual processes, and inefficient integrations escalate the cost of policy management and customer acquisition.
- Slow Product Development: Legacy systems require extensive manual coding for minor updates, prolonging product development cycles significantly, limiting innovation.
- Integration Challenges: Built on outdated architectures, legacy platforms lack modern APIs, complicating or even preventing integration with contemporary digital tools and third-party services.
These issues highlight how legacy insurance software can significantly influence insurer's agility, competitiveness, and customer experience.
Modernizing such systems becomes essential for insurers aiming to streamline operations, innovate quickly, and integrate seamlessly with modern technologies.
Three Core Principles of Openkoda Insurance Software Modernization
To succeed, insurers require a clear, proven approach that simplifies complex modernization efforts.
At Openkoda, our software modernization strategy is built around three core principles: Extend, Modernize, and Replace.
Each principle addresses specific challenges related to legacy software, enabling insurers to enhance their technology capabilities, streamline processes, and optimize resources.
When crafting a successful insurance legacy system transformation strategy, consider which parts of your software architecture need extension, modernization, or complete replacement.
Should you focus equally on extending and modernizing, or would incremental replacement of an entire system be more effective?
A balanced approach ensures smooth transitions, minimizes disruption, maximizes ROI, and prepares insurers for current and future market demands.
Extend
The “Extend” principle recognizes that sometimes insurers must retain certain legacy systems because they handle critical operations or store vital data.
Rather than immediately replacing these systems, Openkoda enables insurers to seamlessly extend their existing software through APIs, advanced integrations, and modular applications.
This approach allows insurers to preserve valuable core functions while adding innovative capabilities such as embedded insurance forms, customizable claims management, or AI-driven reporting functionalities.
Modernize
Modernizing existing software involves incremental improvements that refresh and upgrade critical parts of the legacy system without fully replacing it.
Techniques include re-platforming, refactoring code, migrating to cloud infrastructures, and containerizing applications.
Openkoda’s modular architecture facilitates gradual modernization, enabling insurers to integrate new functionalities into their legacy software environments while significantly boosting software performance.
Replace
The “Replace” principle acknowledges scenarios where legacy software has become too costly, inflexible, or inefficient to support the insurer’s long-term business goals.
In such cases, Openkoda provides insurers a powerful foundation for fully replacing outdated software with modern, flexible, and scalable solutions.
Openkoda’s open architecture, standard programming languages, and built-in functionalities allow insurers to rapidly build highly customized, cloud-native applications tailored specifically to their business requirements.
By fully replacing legacy systems with Openkoda, insurers eliminate recurring issues like vendor lock-in, cumbersome updates, and restrictive licensing, positioning themselves to swiftly innovate, scale effortlessly, and effectively future-proof their business.
Why Choose Openkoda to Modernize Your Insurance Legacy Software?
When starting a transformation project for your insurance legacy system, you have plenty of options on the table. You could delegate tasks to your internal IT team or outsource insurance software development to a custom software company.
However, if you’re aiming for the ideal balance of speed, cost efficiency, and high-quality software, partnering with Openkoda is your best option.
Openkoda is a powerful insurtech platform specifically designed to help insurance companies and startups build and scale modern systems—without the risk of vendor lock-in.
With our ready-to-use templates and a highly customizable foundation, Openkoda significantly reduces development time, enabling your team to focus more on innovation, optimization, and driving business growth.
But Openkoda is more than just a platform.
Our dedicated team of experienced developers ensures you fully leverage all platform capabilities, providing personalized support tailored to your unique business needs, acting like a guides through the entire process of legacy insurance software modernization.
Want to learn more how to best transform your legacy insurance software architecture in the most time and resource efficient way? Check out the full guide in the link below:
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