NEWTOWN SQUARE, Pa., June 17, 2013 /PRNewswire/ -- Aging legacy systems continue to be a top-of-mind concern for the insurance industry, reveals a survey by SAP AG (NYSE: SAP) conducted among 203 insurance executives at the IASA Annual Conference held earlier this month. Fifty-four percent of insurers believe the best practice for managing core systems modernization is to find a trusted partner with an integrated solution platform. This was in contrast to 23 percent of the respondents who would consider preserving as much of the legacy systems as possible and another 23 percent who would prefer replacing the legacy systems with an in-house build.
Aging legacy systems are a prevailing hindrance for insurers, as 67 percent of the respondents admitted they are dealing with this issue. Even though insurers are unsure of how to approach a core systems upgrade, they generally recognize the major challenges that need to be addressed to effectively tackle the core system modernization. Thirty-eight percent of respondents felt that their systems are completely outdated, poorly integrated and cannot be modernized incrementally, while 29 percent indicated an inability to bring the IT and business teams together to fully understand the problem and the opportunity.
"As the insurance industry becomes increasingly commoditized, speed and agility serve as a key competitive advantage for insurers as they look to differentiate themselves and capture more market share," said Robert Cummings, global head of insurance business unit, SAP AG. "Collaboration between IT and business teams along with a trusted enterprise partner that can seamlessly upgrade and modernize core systems is crucial to reach new markets and manage the entire customer life cycle."Insurers recognize the challenges and what is needed to address the issues. Among their upgrade considerations, they believe that analytics is the No. 1 key to gaining competitive advantage. Forty-three percent of the respondents believed that advanced analytics for greater insight into the business, including predictive and fraud management, are essential for them to differentiate themselves. Mobile workflows and apps for employees, agents and customers came in second (22 percent), followed by a third consideration (19 percent) for delivering a single view of the customer and creating a great customer experience at every touch point across the policy, billing and claims cycle.