Many of today's P&C insurance carriers are still dependent on legacy systems for their core claim processing. As a result, they are burdened with manual processes, operational inefficiencies, and high costs associated with processing data multiple times and securing new customers to replace the unhappy ones. When faced with the process of IT transformation, however, these carriers often must confront several challenges before they can reap the desired benefits of faster, more accurate claim processing and better customer service.

The claim transformation journey is not the same for every carrier. The speed of decision making for major projects, the availability of funding, and project prioritization — both in terms of burning platforms and department clout — are among the typical factors that determine how long it takes to launch any major project. Regardless of the transformation timeline and the strategy required to get there, every carrier will encounter five major milestones, each of which must be recognized and responded to appropriately to maximize success. As you'll see, subsequent decisions will build on prior actions, and the success of the legacy transformation project will depend on all of them.

Transformation is more than just replacing the legacy claim system. Because of the age of many legacy systems, over the years, carriers have often adopted business practices that were built around their claim system's limited capabilities and increasing shortcomings. As a result, the entire claim operation must be reevaluated. Changing the system without examining directly and indirectly related business processes, the interaction with claimants, and how data is managed would be akin to driving a sports car the same way great grandpa drove his Model-T: You'll not only have a serious crash, but you'll also do so much faster.