Property and casualty (P&C) insurers need to take strategic steps to modernise their aging core systems, according to a new report by McKinsey & Company. These outdated systems are increasing IT costs and slowing down operations, just as customer expectations are growing.
Three Paths to Modernisation
The report identifies three main ways insurers can upgrade their technology:
- Building custom systems
- Upgrading existing legacy platforms
- Adopting off-the-shelf software solutions
Each approach comes with its own pros and cons in terms of cost, control, and how easily it can grow with the business.
McKinsey notes a growing trend: fewer insurers are choosing to build systems from scratch. Instead, many are turning to configurable SaaS (Software-as-a-Service) solutions or enhancing their current platforms.
Business and IT Must Work Together
The report stresses that both business and IT leaders must collaborate on any modernisation effort. Simply updating technology isn’t enough. Real improvements come when companies also redesign their business processes at the same time.
By aligning new tech with better workflows, insurers can boost efficiency, improve customer service, and save money in the long run.
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