IE caught up with Chris Eley at TXP recently, to learn more about Gen based applications;
Why are Gen-based apps so essential for insurers?
Gen-based applications remain essential for many insurers because they support core operational systems that have evolved over decades. During its peak adoption from the late 1980s through the early 2000s, Gen (formerly CA Gen, COOL:Gen) was widely used to build large-scale, transaction-heavy applications supporting critical insurance services.
To this day, Gen-based applications commonly run core functions such as policy administration, claims processing, underwriting workflows, rating and eligibility decisioning, and billing and premium management.
The business rules embedded within these functions, including claim acceptance criteria, coverage eligibility thresholds, pricing logic, and regulatory requirements, have been refined over more than 30 years and are now tightly interwoven with Gen-based systems. As a result, these applications are deeply rooted in the day-to-day operations of many insurers, quietly powering essential processes that support millions of policyholders.
What challenges do Gen-based apps pose for insurers today?
The insurance industry has evolved to a point where it is almost unrecognisable from the era in which Gen peaked. The sector has grown dramatically, with global premiums expanding in both volume and value – from billions of dollars to trillions.
Technology has evolved just as significantly. Over the past 15 years, cloud computing has transformed how applications are built and run, introducing modern architectures and cloud-native technologies that enable far greater flexibility and agility. Innovations such as real-time policy assessment and AI-driven decision-making have increasingly become baseline expectations for both insurers and their customers.
Amid all this change, Gen-based apps have not kept pace. There hasn’t been a major update to the underlying Gen development platform for more than a decade, meaning insurers are saddled with rigid apps that can’t integrate with modern cloud platforms and AI technologies. What’s more, Gen-based applications are becoming increasingly expensive to maintain. They lack the agility modern insurers require to introduce new products and services and react to regulatory changes at pace. So, these systems that were once thought to be futureproof are now weighing insurers down, exposing risk and constraining innovation at a time of intense competitive pressure.
So why haven’t insurers modernised Gen-based apps before now?
The underlying challenge is the scarcity of specialist skills. The generation of developers who built and maintained Gen systems has moved on to newer tech, or retired, while newer recruits lack the training and expertise required to manage or modernise Gen. The challenge also extends far beyond technical complexity and coding. Because Gen-based applications have become embedded in critical business rules, over time it’s become more difficult to unravel the technology from operational logic without a deep understanding of both. Delicate T&Cs around the Gen product have also limited the available options for migrating away from the platform.
Without the skills and knowledge required to modernise Gen-based apps, most insurers that have attempted transformation projects either failed and reversed course or embarked on multi-year programmes that cost millions of pounds. These complexity and cost challenges have driven most other organisations to avoid making any major changes. Especially as many Gen-based apps are still reliable – albeit within powerful constraints and alongside a growing list of challenges. So, insurers have adopted an “if it ain’t broke, don’t fix it” mindset.
But that balance is shifting as operational risk increases. The insurance industry has reached an inflection point where “good enough” is no longer sufficient, and it’s widely accepted that Gen-based applications must be overhauled. The potential cost implications of not doing anything are now too great to ignore.
How should insurers modernise Gen-based apps?
Modernising Gen-based systems through a single, large-scale transformation is rarely practical, as updating decades of development and accumulated logic is highly complex and resource intensive. Instead, a structured, phased modernisation strategy allows insurers to build momentum, gradually reduce reliance on legacy technologies, and apply automation and AI to deliver measurable business and operational value. To support this journey, insurers can adopt several modernisation strategies, commonly grouped into the five Rs.
One approach is rehosting, where a Gen-based application is migrated to a different infrastructure, including physical, virtual, or cloud environments, without changing its code, features, or functionality. Another option is refactoring, which involves rewriting the application into modern, maintainable code so it can operate across cloud, on-premises, or hybrid infrastructure environments. Insurers may also choose to revise application code, improving performance and removing technical debt associated with Gen. When incremental updates are insufficient, organisations can rebuild the application entirely, redesigning it from the ground up and optimising it for modern insurance processes and platforms. The final option is to replace Gen-based applications with alternative solutions that better support current product innovation, regulatory demands, and customer experience expectations.
But regardless of which path insurers choose, the most important point is to begin the journey towards Gen modernisation as quickly as possible. If insurers continue to delay, they’ll get stuck in a bygone era, whilst competitors race ahead with modernised applications that work for the insurance market of today, and tomorrow.
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