Why Legacy Insurance Core Systems Are Holding Insurers Back
For decades, insurance core systems were designed to prioritize stability over adaptability. While this made sense in a world of long product cycles and limited digital distribution, today’s market reality looks very different. Customer expectations, regulatory pressure, and competitive dynamics have shifted — yet many insurers are still operating on legacy cores that were never built for this environment.
The result is not just technical debt, but strategic inertia.
The Hidden Cost of Legacy Technology
Legacy insurance platforms often appear “stable” on the surface. Policies are issued, claims are processed, and reporting works — until insurers attempt to innovate.
Common challenges include:
- Long release cycles that slow time-to-market
- Complex integrations requiring custom point-to-point connections
- High dependency on specialized skills and external consultants
- Limited ability to leverage modern data, automation, and AI capabilities
Over time, these constraints accumulate. Innovation becomes risky, compliance changes expensive, and operational agility nearly impossible.
Why Modern Insurers Are Re-thinking the Core
Leading insurers are increasingly questioning whether incremental upgrades are enough. Instead of patching aging systems, they are moving toward API-first, cloud-native core platforms designed for continuous evolution.
This shift enables:
- Modular architecture with clear separation of concerns
- Easier integration with digital frontends, data platforms, and partner ecosystems
- Faster product configuration without deep code changes
- Ongoing compliance and security updates without disruptive upgrades
Crucially, modern cores are built to change — not to be replaced every decade.
Real-World Modernization: Lessons from the Market
Across Europe, insurers that have successfully modernized their core systems share a common approach: they focus on reducing long-term risk, not just short-term implementation speed.
One example is Frende Forsikring, which replaced its legacy core platform with a modern, API-first insurance core to support future growth, data utilization, and regulatory readiness. Rather than treating modernization as an IT project, it was approached as a strategic transformation of the operating model.
You can read more about one of the biggest insurers in Norway, Frende and their modernization journey and the rationale behind replacing a legacy core platform here:
https://ibapplications.com/customer-case/frende-why-we-replaced-our-legacy-core-with-ibsuite-an-api-first-cloud-native-insurance-platform/
Modernization Is a Strategic Decision, Not a Technology Trend
Core system modernization is not about following hype. It is about ensuring that insurers remain competitive, compliant, and capable of evolving alongside their markets.
As product complexity increases and digital ecosystems expand, the core system becomes either a growth enabler — or a structural constraint. Insurers that recognize this early gain a decisive advantage.
