This article is by Preston McCamy, VP of Global SaaS Migration, Duck Creek Technologies
More than half of insurers are planning significant technology modernization between 2026 and 2028. That is a positive sign, but it also reflects how urgent the issue has become.
Many carriers are no longer modernizing simply to refresh aging technology. They are responding to a more fundamental operating challenge: legacy core platforms can make it harder to deploy AI, respond to catastrophe-driven claims volume, introduce products and pricing changes quickly, and meet rising expectations for data quality and governance.
The issue is not that an older platform cannot continue to operate. It is whether it allows the carrier to move at the speed the business and market now require.
The three pressure points are converging
The legacy problem isn’t new. What’s new is that the consequences are hitting simultaneously, from three directions at once.
· The first is AI. Carriers are under enormous pressure to deploy artificial intelligence across underwriting, claims, and customer experience. But AI is only as capable as the data infrastructure beneath it. On fragmented, outdated stacks, AI initiatives stall before they reach production. The technology exists but the data foundation to support it usually doesn’t. Legacy platforms do not make AI impossible, but fragmented data, brittle integrations, manual workflows, and slow release cycles make it much harder to operationalize safely and at scale. The competitive difference will be who can move AI into production, not simply who can pilot it.
· The second is catastrophe response. Climate volatility has raised the operational stakes for every carrier writing property business. During a major event, legacy constraints can make it harder to expand claims intake, automate triage, route work, issue payments, and communicate consistently with policyholders. People remain essential, but adding people is not a substitute for a platform that can absorb volume, prioritize work, and provide timely data across the claim’s operation. That level of resilience is no longer a competitive differentiator. It is a baseline expectation.
The third is market and regulatory agility. Carriers need to adjust products, rates, underwriting rules, and reporting as risk and market conditions change. On legacy platforms, even contained business changes can require extended development, integration, and regression cycles. The same fragmentation makes it harder to produce clean, traceable data when regulators, auditors, and business leaders ask for it. What begins as a delay in business response can quickly become a governance and compliance risk.
Why the window is narrowing
Each of these pressures is significant on its own. Together, they create a compounding problem because every year a carrier delays modernization is a year competitors are building on more capable infrastructure, deploying AI faster, and absorbing CAT events with less disruption.
The carriers that modernize early aren’t just solving today’s problems. They’re building operational leverage that widens the gap with every passing cycle. Modern core systems create a platform effect: each new capability becomes easier and faster to deploy. On legacy systems, the opposite is true. Every addition increases complexity, and that complexity can compound, the way debt does when you keep making minimum payments.
There’s also a talent dimension that doesn’t get enough attention. The engineers and architects who built and maintained legacy systems are retiring. Institutional knowledge is walking out the door, and the pool of talent willing to work on decades-old technology is shrinking. Carriers that haven’t begun the transition are increasingly dependent on a narrowing group of specialists to keep critical systems running. This is a fragility that rarely appears on a risk register until it’s too late.
What waiting actually costs
The instinct to delay modernization is understandable. These are complex, high-stake transitions. Core systems touch everything — policy, billing, claims, distribution — and the prospect of disrupting operations mid-flight is genuinely daunting. The carriers I work with who have come through migration consistently say the same thing: they wish they’d started sooner.
The risk is not just operational. It is strategic. A carrier that cannot operationalize AI, scale during catastrophe events, respond quickly to market change, or meet regulatory data demands is losing ground one deferred capability at a time. By the time the competitive gap is visible from the outside, it may have been widening for many years.
There is also the question of transformation capacity. As modernization activity increases, experienced migration leaders, implementation partners, architects, and testing resources will be in greater demand. Carriers that begin earlier have more flexibility in partner selection, sequencing, and commercial structure. Those that wait may face tighter capacity, less negotiating leverage, and more compressed timelines. It’s a decision that can’t be deferred.
The 2026–2028 modernization wave is coming whether carriers are ready or not. The question is whether they’re driving it or being dragged by it.
For carriers still weighing the decision, the calculus is changing. The cost of transformation is beginning to look manageable compared to the compounding cost of standing still. Legacy technology was never meant to carry the weight the industry is placing on it now. The carriers that recognize that earliest will be the ones best positioned to compete in the years ahead.
The window is open right now. It’s not going to stay open much longer.
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