If there is one consistent discussion point in the insurance technology debate it centers around the need for modern core solutions. I've been listening to industry analysts and consultants discuss the issue for years to the point where I wondered if anyone was truly listening to what these industry experts were saying.

Of course the industry is listening, but knowing what to do and actually going out and doing it are two different situations. This may not be the best comparison, but look at your personal life. There are a lot of things we want in life that we may think we need—or more likely, just really want—but we put off buying a new home or a new car or the iPad2 for a number of legitimate reasons.

For some of us, those debates usually come down to money, but often the answer is a real fear of replacing something that already works with something that has the potential to make life easier or more enjoyable. Potential, though, is often viewed as a curse.

Celent's Karen Monk brings up a good point in her blog posting last week:

“Listening to a panel of insurance company CIOs recently, it came to me that once an insurance company begins to see the benefits of configurable systems how can they not be sold for future change of all their systems? Quite often it is the inability to change that prevents a user from accepting something new.”

Making changes in your core systems is often the defining moment in the career of a CIO. As much as they hate the legacy systems they inherited from their predecessors, IT leaders have to feel a grudging admiration for the dependability of those old systems.

Sure, the old stuff can't do the job that new software can perform. It's slow and incapable of allowing insurers to display the flexibility that distinguishes top carriers from the competition.

Monk explains that Celent is preparing to release its annual study of insurance software deals and that core system replacements are higher this year than in the past. I suppose there comes a point in time when a company is handcuffed by its legacy systems to the point where replacement is the only viable strategy.

But many carriers are going to resist the impulse to spend all that time and money until it is absolutely necessary. As the years pass, necessity becomes reality for many insurers and they are dragged, kicking and screaming, into the real world. Is resistance futile? Only if it's your long-term strategy.

Special Reports /

Core System Replacement: What&rsquo;s Taking So Long?

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Core System Replacement: What’s Taking So Long?