Why smart insurers are modernizing their mainframes now insurance blog clicksud.us

In a market that calls for insurers to be agile and digitize in a big way, an insurer’s mainframe can either catalyze or hinder progress. While mainframes were once a valuable core technology function, many legacy mainframes lack the agility to meet customer expectations and the demands of rapid digital advancements.

call for mainframe modernization

Insurers want to access a digital end-state and embed the enabling functions they need to perform in the cloud using a faster, better and cheaper route. Modernization of mainframe is the last mile towards enabling business capabilities, reimagining business and driving cloud operating model.

If we look at the market forces shaping the broader industry, insurers There is a call to be more agile to keep pace with rapidly changing demands. This is due to a number of factors, from higher inflationary environmental spending and rising claims for insurance operations, to the impact of the global pandemic and projected recession. With the high-interest rate environment and anticipated future volatility, there is a need to reduce costs, and one of the costs that increases year after year is mainframe maintenance.

Zooming in on areas within insurance, the need for agility manifests itself in a variety of ways. Property and casualty (P&C) insurers not only need to be more agile, but need to focus on marketing points of differentiation while commoditizing non-differentiators. The life and annuity (L&A) and retirement industry would benefit from unlocking distribution, a feat that is currently not possible because so much of the logic is embedded in mainframes. Hence, the focus is on modernization of mainframes to enable digital channels. Group and retirement insurers are undergoing a contagion transformation – meaning the sector needs reimagined operations from the ground up to improve customer relationships and gain competitive advantage – hurting the group on margins , and is hurting retirement at margin and scale. Finally, groups and health insurers are being challenged to reduce the cost base and drive growth, for example by adding a wellness layer to their offering.

From a cost perspective, the case for mainframe modernization is clear. Demand on insurance infrastructure is increasing, business capacity needs to scale to million-instruction-per-second (MIPS) utilization and cost. Older mainframes also have an impact on talent, as dedicated employees will be needed to provide maintenance and upkeep – a diminishing skill set as more and more senior employees retire from the workforce. Down the line, this appears to pose quite a business risk.

Modernizing mainframes is not just about overall agility, but securing a foundation for significant technological change. in a recent report Transforming Claims and Underwriting with AIAccenture shows with extensive industry research that AI has emerged as a transformative technology and key differentiator in the insurance industry when implemented in conjunction with humans. However, AI transformation is not possible if the insurer has not first dismantled and updated the mainframe platform.

Results of Mainframe Modernization

Modernizing mainframes offers some compelling benefits. Running in a less expensive environment, operating costs are greatly reduced, and the use of more modern platforms dramatically reduces platform resource costs. Together, this could result in a 40 percent reduction in operating expenses. While this savings is significant, it is not the only benefit. Most important, mainframe modernization – through increased agility, flexibility and access to critical mainframe data – has a powerful impact on business value. As a recent Accenture blog, Mainframe: The Final Frontier for Cloud Migration Emphasizing that, customers are able to leverage their mainframe data, which can span decades of business transactions, and use that data to drive analytics or machine learning initiatives that can provide a competitive advantage. The blog post also highlights the important role modernization of mainframes plays in closing the skills gap – this could address a problem facing many companies as their mainframe specialists reach retirement age and need to modernize core business workloads. Can also attract new talent interested in

Modernization also provides the ability to deploy new features, products and capabilities much faster and in conjunction with interoperable applications, promising up to five times the deployment speed. New business capabilities are also unlocked, such as the ability to incorporate AI and ML, real-time decision making and data processing efficiency. These benefits can be brought about by conservative adjustments, or whole system changes. It all depends on the strategic and development priorities of the insurance business.

New platforms and migration technologies allow for compressed changes

Mainframe modernization isn’t a one-size-fits-all proposition. It is driven by the unique market needs of the insurer and the strategic intent of the business. A wide range of options are available for modernization at a pace comfortable and required for the insurer. Today’s mainframe migration technology supports this, allowing for automated, fast and low-cost migration to the cloud. This technology includes SaaS solutions, cloud maturity, and advances in migration technologies.

In terms of approaches, insurers can implement the following interventions, which all vary in scale and intensity:

  • re forum: Migrating an application without changing programming language to another platform/operating system
  • factor again: Using Accenture’s Language Migration Toolkit to convert from legacy to modern programming language code using (semi)automated tooling to reduce risk associated with old skills, increase agility, and reduce costs
  • Change: Identifying a managed service/application that can provide the required functionality, including extracting and migrating data to a new system, to reduce complexity and cost
  • imagine again: Reimagining business with completely rewritten and streamlined applications

How insurance companies can start their mainframe modernization journey

There are nuances to how mainframe modernization is implemented within insurance. These solutions vary in intensity from the business benefits to the technology used. Application depends on whether the insurer specializes in life and annuities, group and health, retirement, individual lines/small commercial and large commercial. However, there are three key phases that determine the direction of every mainframe modernization journey:

  1. defining business priorities
      • One. What are the top priorities for the business?
      • B. How do they line up for the major problems caused by running on a mainframe?
  1. Identifying Budget Constraints
      • One. How much budget is available today?
      • B. What is the tenure available to get ROI?
  1. Determining Capacity for Change
      • One. What is the IT team’s ability to change?
      • B. What resources are available?
      • C. Is there anything else changing?

Following this process creates a unique mainframe modernization plan.

Accenture’s insurance mainframe modernization methodology will help you develop a journey tailored to your goals. Contact Us to Get Started.

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Disclaimer: This material is provided for general information purposes and is not intended to be used in place of consultation with our professional advisors.
Disclaimer: This document refers to marks owned by third parties. All such third-party marks are the property of their respective owners. No sponsorship, endorsement or approval of this content by the owners of such marks is intended, expressed or implied.

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