You can’t build a tech legacy on legacy tech

It’s not always immediately apparent, but for those sitting still – or even worse, planning a multi-year transformation project that’s out of date before it even begins – it’s happening quicker than they realise.

The emergence of insurtechs bent on disrupting the status quo due to changing consumer expectations has accelerated a natural selection process forcing all insurance providers to respond by investing in building their digital capabilities in the right way – or simply get left behind.

Be bold, not reckless

Many insurance businesses are run on large, complex systems – glued together with something that is taking an increasing effort to hold in place – and simply cannot cope with the agility that an entirely new multi-channel offering requires.

Ripping out an entire system and replacing it comes with considerable cost, effort, and significant risk. Equally, moving away from a legacy tech stack to team up with a new partner to develop a unique proposition requires a leap of faith with reputations on the line.

It isn’t a leap of faith if you start small and build in flexibility: the smart way is to scale down to begin with, take a test and learn agile approaches. This is the time to be brave, but we shouldn’t equate bravery with recklessness.

Address the mess

Creating the business case is where you need to pay close attention – avoid rushing or treating it as a tick-box exercise to get onto the exciting bit.

Suppose a digital incumbent has a reasonable-size architecture and needs to ditch the legacy middleware layer. They’ll need to work out the costs in terms of people, time, server costs, dev ops, etc. It’s a long list, and it’s too easy to run out of steam.

It will take time and effort – but getting the business case pinned down, complemented by a clear strategy that allows flexibility and incremental change, are vital components to getting the right outcome.

Plan for change

As the landscape continues to evolve, so does technology.

For example, many businesses set themselves up with APIs – sometimes ahead of the curve – and thought they’d ticked the integration box. But things continually change, and the APIs of even three to five years ago all had different standards and weren’t designed to deliver actual inwards/outwards exchanges of actionable data.

The result is often a library of APIs of various vintages that don’t quite line up and can’t compete. When it comes to integrating and updating any legacy tech, it requires taking a deep breath and accurate focus and reviewing whether the tech in place now is genuinely future proofing your business.

Be prepared for tough love

These projects can be massive, and they should be exciting, so it’s all too easy for any company to focus their eyes on the desired result rather than its delivery. But you should be open to being questioned about your digital aspirations to get the best outcome.

Don’t shy away from colleagues and partners who challenge the scale and complexity of the project to ensure the end goal is, in fact, achievable or whether it needs to be dialled down to create a well-defined foundation and room to build.

Create a tech legacy, not legacy tech – whatever the scale of your ambition

Scaling down a digital plan doesn’t mean scaling down its ambition but rather evolving at a pace that suits the business.

Being able to respond to the unpredictable and change course as necessary isn’t only helping these digital incumbents catch up and perhaps overtake the digital natives, it’s also the key to preventing technical debt and yet another legacy mess to clear up in the future.

The first step to building a tech legacy you can be proud of within the insurance sector is to ditch the notion that a journey to digital maturity should be overwhelming and complex.

Focussing on evolution, delivering small steps fast to succeed fast while making a real difference in how insurance is done right now, has never been so critical.

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