Legacy systems have their strong points, but even the best need modernization every few years, if only to streamline integration with third party platforms, regulator sites, MGAs etc. Here’s the word;
Adacta, a leading insurance software vendor, has announced the release of its State of Insurance Legacy System Modernization Survey for 2025. This survey offers valuable insights into the challenges, drivers, progress, and priorities influencing the digital transformation of the European, UK and Irish insurance industry.
Adacta’s team researched to deepen its understanding of modernization trends across the European, UK, and Irish insurance market. Building on years of industry experience and ongoing collaboration with insurers, the market study explored how modernization priorities differ across regions and between various types of insurance organizations (MGAs, brokers, P&C, life, and general insurers). From October to December 2024, the survey gathered responses from over 100 senior executives at leading European insurance companies.
The survey reveals that just 51% of insurers are already in the process of digital transformation and have commenced modernization efforts, while the remaining 48% continue operating with outdated legacy systems.
Other relevant key findings:
· Primary Limitations of Legacy Systems: The most significant constraints identified include inflexibility to adapt to market changes (46.4%), integration challenges with new technologies (45.5%), and high maintenance costs (44.5%).
· Drivers for Modernization: The obsolescence of legacy systems (48.2%), the need for improved customer experience (43.6%), and regulatory compliance requirements (41.8%) are the main motivators for initiating modernization projects.
· Systems Prioritized for Modernization: Claims systems are at the forefront of modernization efforts, indicating a strategic focus on enhancing customer-focused operations. But priorities also vary across different types of insurers.
· Stakeholder Perspectives: While departments focused on innovation, marketing, digital transformation, and operations are enthusiastic about modernization, finance, legal, and compliance departments exhibit caution due to concerns over costs, security risks, and regulatory complexities.
This survey stands out as one of the few extensive, data-driven analyses of legacy system modernization in the European, UK and Irish insurance sector, offering valuable benchmarks for industry leaders.
“The insurance industry is at a pivotal point where modernization is no longer optional but essential,” says Alexey Tikhonov, CEO of Adacta. “Our survey highlights the pressing need for insurers to evolve their core systems to remain competitive and compliant in a rapidly changing environment.”
The full report is available here.
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