Why sensible insurance coverage corporations are modernizing their mainframes now | Insurance coverage Weblog

In a market that requires insurers to be agile and digitize at scale, their mainframes can both assist or hinder progress. Whereas mainframes have been as soon as a priceless core expertise functionality, many legacy mainframes lack the agility to fulfill buyer expectations and the calls for of speedy digital development.

Mainframe modernization calls for

Insurers wish to attain a digital finish state and embed the enabling features they should carry out within the cloud utilizing quicker, higher, and cheaper routes. Mainframe modernization is the final mile to allow enterprise capabilities, reimagine your online business, and advance cloud working fashions.

Trying on the market forces shaping the broader business, insurers We must be extra agile to reply to quickly altering calls for. This is because of quite a lot of elements, from the upper inflationary surroundings prices of insurance coverage operations and elevated claims, to the impression of the worldwide pandemic and anticipated financial downturn. Given the excessive rate of interest surroundings and anticipated future volatility, prices must be decreased. One of many prices that has elevated over time is mainframe upkeep.

Specializing in sectors inside insurance coverage, this want for agility manifests itself in some ways. P&C insurers not solely must be extra agile, they should deal with factors of differentiation in advertising whereas commoditizing non-differentiating parts. The life insurance coverage (L&A) and retirement industries would profit from unlocking distribution, a feat at the moment unattainable as a lot of its logic is embedded in mainframes. Subsequently, the main target is on modernizing mainframes to allow digital channels. Group and retirement insurance coverage corporations are present process a compressive transformation. This implies the sector must essentially rethink its operations to enhance buyer relationships and achieve aggressive benefit. Group insurance coverage corporations are seeing decrease margins, and retirement insurance coverage corporations are seeing decrease margins and dimension. Lastly, group and medical insurance corporations are confronted with the problem of lowering their value base and driving development, together with by including wellness layers to their companies.

From a value perspective, it is clear that mainframes must be modernized. Enterprise operate wants are growing calls for on insurance coverage infrastructure, growing million directions per second (MIPS) utilization and prices. Legacy mainframes additionally impression human sources. It is because devoted workers is required for upkeep and maintenance. It is because talent units are declining as an increasing number of senior staff retire. Finally, this presents itself as a big enterprise danger.

Mainframe modernization not solely improves general agility, but additionally ensures the muse for vital expertise transformation. In a latest report, Transforming claims and underwriting with AI, Accenture has demonstrated in extensive industry research that AI, when applied in conjunction with humans, is emerging as a transformative technology and key differentiator in the insurance industry. However, AI transformation is not possible without insurers first tearing down and updating their mainframe platforms.

Modernizing your mainframe offers several attractive benefits. Running in a cheaper environment significantly reduces operational costs, and using a more modern platform significantly reduces platform resource costs. Combined, these can reduce operating expenses by 40%. These savings are important, but they’re not the only benefit. Most importantly, mainframe modernization has a significant impact on business value through agility, flexibility, and access to critical mainframe data. Recent Accenture blogs include: Mainframe: The final frontier of cloud migration He emphasised that clients can leverage mainframe knowledge containing many years of enterprise transactions and feed that knowledge into analytics and machine studying efforts to supply a aggressive benefit. This weblog submit additionally explains how mainframe modernization performs a key position in closing the talents hole. Mainframe modernization can counter the issues many corporations face as mainframe professionals attain retirement age, and likewise core companies thinking about modernizing their workloads. You too can entice new expertise.

Modernization permits you to deploy new options, merchandise, and capabilities quicker, working with interoperable functions to vow as much as 5x quicker deployment speeds. It additionally unlocks new enterprise capabilities reminiscent of AI and ML incorporation, real-time resolution making, and knowledge processing effectivity. These advantages might be achieved via conservative changes or full system conversion. All of it will depend on the technique and development priorities of your insurance coverage enterprise.

New platforms and migration applied sciences allow compressed conversion

Mainframe modernization just isn’t a one-size-fits-all proposition. That is pushed by the insurer’s distinctive market wants and enterprise strategic intent. There are a variety of choices out there to modernize at a tempo that’s snug and essential for insurers. Present mainframe migration expertise helps this, enabling automated, quick, and low-cost migration to the cloud. This expertise consists of advances in SaaS options, cloud maturity, and migration applied sciences.

When it comes to strategy, insurers can deploy the next interventions, all various in scale and depth:

• Replatforming: Migrate your software to a different platform/working system with out altering programming language
• refactoring: Leverage Accenture’s Language Migration Toolkit to transform legacy programming language code to fashionable programming language code, cut back dangers related to legacy abilities utilizing (semi-)automated instruments, improve agility, and Cut back prices.
• Alternate: Establish managed companies/functions that may present the required performance, reminiscent of extracting and migrating knowledge to new techniques to scale back complexity and value.
• rethink: Utterly reimagine your online business with rewritten and streamlined functions

How insurance coverage corporations can start their mainframe modernization journey

There are nuances in how mainframe modernization is utilized inside insurance coverage. These options differ in energy from enterprise advantages to the expertise used. Functions differ relying on whether or not the insurance coverage firm focuses on life and annuity insurance coverage, group insurance coverage and medical insurance, retirement insurance coverage, particular person insurance coverage/small business insurance coverage and enormous business insurance coverage. Nonetheless, there are three key steps that decide the path of any mainframe modernization.

1. Defining enterprise priorities
   1. a. What are the highest priorities for your online business?
   2. b. How do these align with the most important issues posed by operating on the mainframe?

2. Establish price range constraints
   1. a. What price range is offered as we speak?
   2. b. What’s the time-frame out there to appreciate ROI?

3. Figuring out the power to alter
   1. a. How succesful is your IT group to remodel?
   2. b. Are there sources out there?
   3. c. Are there many different adjustments occurring?

Following this course of will create your individual mainframe modernization plan.

Accenture’s insurance coverage mainframe modernization methodology helps align your efforts along with your objectives. Please contact us first.

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