In a marketplace where change is constant, innovation is no longer a choice; it’s the standard for staying competitive. Customer expectations are digital-first, regulatory demands are evolving rapidly, and competition is fiercer than ever. Yet many insurers remain tied to legacy systems that slow them down, hinder growth, and introduce significant risks to long-term success.

Insurers who continue to rely on ageing platforms risk falling behind. It is time to rethink the role technology plays in insurance.

Legacy systems: A roadblock to innovation

Creating and adapting insurance products should be fast, agile, and customer-centric. However, outdated platforms often turn what should be a seamless process into a drawn-out, costly ordeal. Legacy systems were simply not built for the speed and flexibility today’s market demands, making product launches sluggish and expensive.

The opportunity cost is massive. Insurance penetration across regions such as Asia (3.6%), Denmark (5.6%), Sweden (10.6%), the UK (11.8%), and South Africa (14.1%) highlights untapped potential for innovative, accessible insurance solutions. Insurers relying on rigid legacy platforms risk missing out, unable to respond swiftly to evolving customer needs.

We believe insurers must embrace modern core systems that empower faster, smarter product development – enabling them to meet emerging risks and new consumer expectations head-on. So, if any of these sounds familiar, it’s probably time you take a look at updating your core.

1. The heavy cost of maintaining the past

It is not just agility that suffers. According to PwC, around 70% of an insurer’s IT budget is still spent on maintaining outdated systems – resources that could be better invested in modern innovations such as automation, artificial intelligence (AI), and data analytics.

These tools are not merely desirable – they are essential for gaining a competitive advantage. AI-driven insights enable insurers to personalise products, optimise pricing strategies, and predict customer behaviour with greater accuracy. Automated underwriting and claims processing reduce manual work, increase speed, and improve accuracy across both direct-to-consumer and business channels.

We believe technology should enhance human expertise, not replace it. The most effective insurance operations combine smart automation with skilled professionals focused on high-value, complex tasks.

2. Regulatory compliance is increasingly complex

Regulatory pressures are intensifying. Data transparency, security, and governance are now top priorities for insurers worldwide. Yet ageing systems make it harder to keep up. Manual workarounds and fragmented data create operational risks and open the door to costly non-compliance.

The stakes are high: according to EMC, inefficiencies tied to legacy systems cost organisations a staggering $1.7 trillion annually.

Multiple outdated platforms often create data silos, complicating compliance efforts and increasing the risk of errors. Without integrated, real-time data management, insurers face slower response times to regulatory changes – and greater exposure to audits, fines, and reputational damage.

We believe a unified, modernised core system forms the foundation for strong data governance, streamlined reporting, and proactive compliance management.

3. Scaling across new distribution channels is challenging

The insurance distribution model is transforming rapidly. APIs, ecosystems, and embedded insurance are becoming the norm – yet legacy systems, lacking modern rating engines and interoperability, make seamless integration a significant hurdle.

Research from Celent warns that insurers who fail to embrace APIs and ecosystem partnerships will quickly lose their competitive edge. That’s why our solutions offer embedded insurance capabilities, open APIs, and dynamic product personalisation, ensuring you can rapidly connect to new distribution opportunities.

4. Slow product launches and high development costs

Speed to market is critical when capturing new opportunities. However, legacy systems often require manual, repetitive configuration across multiple platforms, delaying launches and inflating costs.

Modern low-code/no-code tools, such as those offered by Seamless Insure, enable fast product prototyping, simplified configuration, and full process support across underwriting, claims, and billing – allowing insurers to launch new products in weeks, not months.

5. Limited scalability and flexibility

Older systems often buckle under the strain of increased workloads, leading to performance bottlenecks, outages, and frustrated customers. Worse still, they restrict your ability to introduce new product lines and grow your business.

With a scalable cloud-based infrastructure that handles peak demands effortlessly and supports your expansion goals, it can ensure that operational performance and customer service excellence are maintained at all times.

6. Poor end-user experience

Today’s customers expect fast, seamless, and personalised experiences across every touchpoint. Slow processing times, inaccurate policy information, and difficult-to-use interfaces drive customers towards competitors.

Seamless Insure empowers insurers to deliver a customer journey that is intuitive, consistent, and personalised – from initial quotation through to claims processing – building customer loyalty and driving sustainable growth.

7. Declining productivity

When employees are bogged down by manual processes and disjointed systems, productivity plummets. Research from McKinsey shows that modernised IT platforms can increase productivity by over 40%, enabling staff to focus on delivering value rather than fighting legacy technology.

With modern systems to automate routine tasks and streamline end-to-end processes, you can free up time from your team to concentrate on innovation and service excellence.

8. Struggles with new business initiatives and technologies

Emerging technologies such as AI, machine learning, IoT, and telematics are redefining insurance. Yet many insurers find that integrating these technologies into legacy platforms requires costly re-platforming and customisation – and even then, results are often underwhelming.

Cloud-native insurance platforms offer modularity and open integration capabilities, allowing you to adopt new technologies swiftly and efficiently, keeping you ahead of the competition.

9. Rising cybersecurity risks and operational disruptions

Cybersecurity threats are at an all-time high. Outdated systems often lack robust defences, leaving sensitive data vulnerable and business continuity at risk. Incidents like the ransomware attack on CNA Financial in 2021 highlight just how devastating a breach can be.

Modern platforms are built with advanced security features and rapid incident response capabilities, ensuring resilience against the ever-evolving threat landscape.

The cost of waiting is too high

We understand that the challenges posed by legacy systems are not isolated issues – they represent a systemic risk to growth, innovation, and sustainability.

Modernisation is not simply about replacing technology; it is about enabling agility, scalability, compliance, and exceptional customer experiences. The goal is to build an organisation ready to meet tomorrow’s demands and seize its possibilities.

If your current systems are creating barriers rather than opportunities, it is time to make a change. We are here to help you confidently navigate your modernisation journey – so you can unlock new opportunities and accelerate growth.

Are you ready to leave legacy behind?