Why smart insurance companies are modernizing their mainframes | Insurance Blog

In a market where insurers are looking to be agile and digital on scale, insurance companies’ mainframes can inspire or stunt progress. While mainframes were once a valuable core technology feature, many legacy mainframes lack the agility to meet customer expectations and the demands of rapid digital advancement.

Calling for modernization of mainframes

Insurers want to embed the enablement features they need to reach the digital end state and run in the cloud using faster, better, cheaper routes. Mainframe modernization is the last miles to enable business functions, rethinking your business and driving a cloud operational model.

Looking at the power of the market to form a wider industry, insurance companies They are being asked to be more agile to meet rapidly changing demands. This is due to a variety of factors, ranging from increased inflationary environmental costs and increased claims for insurance operations to the impact of the global pandemic and the projected recession. High interest rate environment and predicted future volatility will require costs to be lowered, and one of the costs that has been increasing year-over-year is mainframe maintenance.

When you zoom in on a sector in your insurance, this need for agility manifests in a variety of ways. Property and victims (P&C) insurance companies need to be more agile, but also focus on differentiating marketing points, whilst commoditizing non-differentiating factors. Life & Annuity (L&A) and the retirement industry benefit from unlocking distribution. This is not possible at present because much of that logic is built into the mainframe. Therefore, the focus is on modernizing the mainframe to enable digital channels. The group and retirement insurance companies are undergoing a compact transformation. This means that sectors need rethinking operations from scratch to improve customer relationships and gain competitive advantages. Finally, the group and health insurance companies are challenging themselves to drive growth by reducing their cost base and providing, for example, a wellness layer.

From a cost perspective, the case of mainframe modernization is clear. The demand placed on insurance infrastructure is increasing, and business capabilities needs to increase the use and cost of MIPS per second (MIPS) by 1 million times. Legacy mainframes also impact talent as they require dedicated staff to provide maintenance and maintenance. On the line, this manifests itself as a significant business risk.

Modernizing the mainframe is not only about overall agility, but also about ensuring a foundation for critical technological transformation. In recent reports Transforming claims and accepting through AIAccenture shows that when AI was applied in collaboration with humans, AI emerged as a transformative technology and a key differentiator in the insurance industry. However, if the insurance company has not dismantled and updated its mainframe platform in the first place, AI conversion is not possible.

The consequences of mainframe modernization

Modernizing a mainframe has several compelling benefits. Running in a cheaper environment dramatically reduces operating costs, and using more modern platforms dramatically reduces platform resource costs. Together, this could reduce operating expenses by 40%. This savings are important, but that’s not the only benefit. Most importantly, mainframe modernization has a strong impact on business value through agility, flexibility and access to critical mainframe data. As a recent Accenture blog, Mainframe: The final frontier of cloud migration Customers emphasize that they leverage mainframe data that can include decades of business transactions and feed analytics or machine learning initiatives that can use that data to provide a competitive advantage. The blog post also shows the key role that mainframe modernization plays in filling the skills gap. It can counter the challenges faced by many companies as mainframe experts reach retirement age and attract new talents interested in modernizing their core business workloads.

Modernization, combined with interoperable applications, offers the ability to deploy new features, products and features more quickly, promises up to five times faster deployment speeds. New business features such as AI and ML integration capabilities, real-time decision-making, and data processing efficiency will also be unlocked. These benefits can be brought about by conservative adjustments or by complete system conversion. It all depends on the strategic and growth priorities of the insurance business.

New platforms and migration technologies enable compression conversion

Mainframe modernization is not a one-size-fits-all proposition. This is driven by the unique market needs of insurance companies and the strategic intentions of their business. There is a wide range of options available to modernize at a comfortable and necessary pace for insurance companies. Today’s mainframe migration technology supports this, allowing for automated, fast, and low-cost migration to the cloud. This technology includes advances in SaaS solutions, cloud maturation, and migration technologies.

Regarding approaches, insurance companies can deploy the following interventions: All of this differs in scale and intensity.

• Re-Platform: Migrate applications without changing programming language to another platform/operating system
• Re-factor: Use Accenture’s Language Migration Toolkit to convert legacy to modern programming language code, and use (semi-) automated tools to reduce risks, increase agility and reduce costs associated with legacy skills
• ReplaceIdentify managed services/applications that can provide the necessary functionality, such as extracting and migrating data to new systems to reduce complexity and costs
• I’ll reconsider: Rethink your business completely with a rewritten streamlined application

How insurance companies begin their journey to modernizing their mainframes

There is a nuance in how mainframe modernization applies within insurance. These solutions vary in strength, from business benefits to the technology used. This application depends on whether the insurance company specializes in life and pensions, group and health, retirement, personal lines/small and large commercials. However, there are three important steps that determine the direction of the journey of modernization for all mainframes.

1. Define business priorities
   1. a. What is your top priority for your business?
   2. b. How do they match the important issues raised by running on the mainframe?

2. Identify budget constraints
   1. a. What budget is available today?
   2. b. What period of time is available to achieve ROI?

3. Determining conversion ability
   1. a. What are the transformation capabilities of your IT team?
   2. b. Are there any resources available?
   3. c. Are there many other changes going on?

Following this process will result in a unique mainframe modernization plan.

Accenture’s insurance mainframe modernization methodology can help you develop a journey that aligns with your goals. Please contact us to get started.

Facilitate the future of insurance: Technology modernizations such as AI and cloud fuel data analytics can help insurers achieve profitable growth, both with revenue growth and cost-reducing.

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Disclaimer: This content is provided for general informational purposes and is not intended to be used in place of consultation with a professional advisor.

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