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Originally released September 3, 2025
Are you considering migrating your outdated legacy core systems to the cloud or evaluating a new solution? Maybe you’re thinking about a systems modernization effort or digital transformation initiative? Replacing core systems requires a carefully considered roadmap, no matter the motivation or drivers behind the decision. Below are some key factors that make for a successful legacy core systems migration. This list is by no means comprehensive and each
carrier has unique circumstances, however ignoring one of these may be a shortcut to the graveyard of failed implementations.
The Carrier Advantage: Benefits of Modern Portal Solutions
Digital transformation unlocks efficiency, growth and innovation. Do you replace your legacy core system with another core system or are there other options to consider? While vendor/platform selection is a vast subject in itself and is not the focus of this article, something to keep in mind is that legacy core systems are being replaced by insurance value chain platforms. What differentiates core systems from an insurance value chain platform? It’s more than semantics, the two are quite distinct. Traditionally, core systems enable business processes and workflows within an insurance carrier enterprise and focus on internal users and departments. Most legacy core systems don’t provide business functionality for policyholders, healthcare providers, agencies, law firms or other service providers. Insurance value chain platforms not only perform all the functions of a traditional core system but also enable key business processes and workflows for and between external users as well as internal users in real time. These platforms support execution of complex end-to-end workflows with industrial strength security. Most modern insurance value chain platforms also include collaboration with messaging, alerts, reminders and emails. Push and pull strategies blend offering unmatched efficiency, ease of use, and robust communication. Insurance value chain platforms also provide the backbone for effective digital transformation providing workflows for new business processes or process redesign. In other words, evaluate vendors that offer an insurance value chain platform.
Governance
Think beyond on time and on budget. Managing time and budget milestones is important but it’s far more effective to manage scope, schedule/resources, risks/issues, and budget. These are four legs of the governance table and will help executives stay on top of an implementation :
- Control scope creep and scope changes specially after requirements are signed off
- Review and manage changes to schedule and resources in case of escalation
- Identify and manage risks and resolve them in a timely manner so they are mitigated instead of turning into issues
- Manage changes to the budget for overriding criteria such as a change in priorities or objectives
Business Process Design/Redesign
Replacing a legacy core system is an opportunity to create efficiency and innovation through review and implementation of new or redesigned business processes. Your vendor/system selection should focus on differentiating solution offerings regardless if they are core systems or an insurance value chain platform. There are significant gains in efficiency to be realized by integrating workflows between carrier departments, agencies, policyholders, law firms and other service providers. External user business processes are not well served by legacy core systems. These are areas where significant efficiency may be created by implementing a new insurance value chain platform. This effort requires active participation and sign-off by business users and may result in multiple swimlanes of work. It adds to the implementation effort; however, the payback is significant.
Program/Project Management
The program/project management structure is another critical component contributing to overall success. Typically, migration projects of any size utilize a Steering Committee, Project Committee and Swimlane project structure. Some legacy core system migrations are very complex requiring multiple project managers and a tiered project structure involving multiple lines and countries. However, most small to mid-size carriers do not require a program manager/project manager(s) structure. Key project management controls/activities include:
- Specify project objectives and drivers; ensure the project team understands them
- Adopt formal change control processes managing scope, schedule, resources and budget
- Formal technology ecosystem articulation
- Clarify internal and vendor roles and responsibilities
- Develop solution design prior to work plan/project milestone development
- Perform swimlane identification and resource assignment
- Define/educate the team about cross swimlane communication & escalation processes
- Project status updates; actively manage dependencies
- Manage risks and issues
- Manage quality, perform assessments of requirements, processes and proposed solutions
- Develop and deploy an effective communication plan
- Formal change management addressing organizational change including resistance
Requirements, Resources and Budget Commitments
There have been hundreds if not thousands of articles written about quality of requirements gathering and the extent to which it affects implementation success. There are several effective requirements gathering methods/tools available. Pick one that has worked for your organization previously or select one that you may train your internal users as well as your vendor project team. The tool needs to be one that both your business users as well as your IT staff understand and are willing to use. Ensuring quality requirements gathering with formal sign-offs acts as an insurance policy keeping carriers and vendors committed to delivery of mutually agreed upon business functionality.
As an executive sponsor of an implementation, you’ll need to empower your program/project manager to put together a team with the best available internal resources. This might mean freeing up internal resources fully or partially from other commitments. Negotiate with your vendor to make sure their first-string resources are assigned to your project. Staffing your implementation with quality resources is a necessary success step.
Your steering committee and program/project management will need to implement formal change control to manage scope changes and their budget impact. After initial requirements and a budget are baselined, formal change control practices will help you decide if a scope change is required, desirable and to be included in a go live cutover. Flexibility is key in keeping project schedules and budget on track. Some scope change may be scheduled after going live. There are a handful of reasons that scope changes and budget changes originate. As a best practice, your vendor should be completely transparent and list what these might be from their perspective. Identifying these formally (and if needed contractually) helps in managing change. While change control reasons may differ due to unique carrier circumstances, as an executive sponsor, you have the option of adding a budget buffer. The final budget and buffer approved by your executive team and your board is a confidential matter that you may decide not to share with vendor resources or possibly with your internal project team.
Technology Ecosystem – Ai, Cloud, and Mobile inclusion?
Please refer to a comprehensive study* of thousands of agents/policyholders performed by Nationwide Insurance a few years ago. Speed, self-service and collaboration were key asks.
Implementing new or redesigned business processes requires more than a few new transactions performed by external or internal users. Your external users – agencies, policyholders/members, law firms etc. are demanding a seamless and real-time experience that may only be offered by an insurance value chain platform with an open and connected technology ecosystem. Your implementation roadmap should identify and prioritize business
partners and vendors that provide open systems and connectivity. This may require a cross-organization and cross-department teams to be put together and of course will create multiple work swimlanes for your project implementation team.
Artificial Intelligence, cloud and mobile technology are digitally transforming user experience and collaboration. Your implementation should address how AI may help address business areas such as product development/rate-making, agent-underwriter interaction including straight-through processing, price optimization, claims processing just to name a few. In addition, your legacy core systems migration plan should include mobile apps. Customer demographics are changing rapidly and providing cloud-based web applications and native mobile apps let carrier customers and agencies pick the device of their preference to conduct business with carriers 7X24. These capabilities future-proof your investment in a new platform.
Data Migration
Data migration is a high-risk area in a legacy core systems migration. Older systems have cryptic, difficult-to-understand data representation under the covers. Data may not be normalized or in some cases it may be over normalized. Typically, this leads to significant challenges if a decision is made to automate data migration. Automated data migration is very prone to slippage in implementation deadlines. The simple fact is that the state of data in legacy core systems is poor. While this may be an oversimplification, it is largely true. We recommend customers perform cost benefit analysis for any automated data migration. Unless there’s an overriding reason to automate data migration, we recommend using a combination of manual and automated processes to migrate to a new platform. For example, running off policies and billing on a legacy system and renewing policies on the new platform may be far more effective than attempting to automate migration. Historical policy and billing data may be brought across electronically in a read-only, non-transactable state. Similarly, claims may be moved using a combination of automated and manual processes. If you do decide to perform an automated data migration, here are a few steps from our methodology that may help:
- Source Data Inventory
- Source Data Quality Audit/Validation
- Source Data Transformation
- Source-Destination Cross Reference
- Source-Destination Programming
- Interim and Destination Data Testing
- Destination Control Reports
- Perform Multiple Iterations
Operational Readiness, Training and Cutover
An operational readiness assessment well in advance of a cutover is critical. Whether you choose direct training delivery or you leverage a ‘train the trainer’ approach, well-trained users are just one part of a successful runup to going live. New business process or re-designed processes require change management procedures to be implemented side-by-side with systems training. Most organization eschew formal testing and evaluation as part of operational readiness assessment however performing some degree of evaluations may help expose gaps that can be addressed in a timely manner.
There is no substitute for formal cutover planning. A step-by-step detailed task list or work plan with resource assignments is a must, no matter the size of your implementation.
Support and Improvement
Previously established success criteria may be used post cutover to perform an evaluation of milestone achievement. Your project team and vendor will specify support processes mutually; however, you’ll need to ensure that the vendor’s service level guarantee is adequately detailed. For example, at a minimum, your vendor should specify their cloud availability SLA, backup schedules, restore schedules in case of failure, environmental software versions supported (browsers, database, operating system, iOS and Android versions, any middleware, etc.), and vendor software support SLA. Ideally, business users should have access to a Staging environment that they may use to test any new features that are scheduled for release.
Ongoing improvement requires the setup of an internal project team that may be resourced from the original project team. This is highly recommended as new platforms and new processes may have favorable results that may be leveraged further. It also creates a vehicle for implementing ongoing regulatory, compliance and business changes.
In closing, the above is a handful of factors affecting legacy core systems migration success. Having implemented platforms successfully for organizations ranging from several billion dollars to a few million in size, I can say that while there are broad guidelines for success there is no canned out-of-the-box formula as each carrier has unique circumstances and any implementation approach will need to be tailored.
*Reference: https://news.nationwide.com/092921-expectations-grow-for-agents-as-pandemic-persists/
