One of the deepest concerns Americans have today is that their political leaders are delaying the inevitable. Instead of facing up to the financial problems our country faces, they choose to put things off and borrow against the future.

I sometimes wonder if insurance carriers aren't employing the same strategy, particularly when it comes to their core solutions. There is no doubt that legacy replacement has been an important issue for most of the first decade-plus of this century, but industry observers don't see any short-term end to this situation.

An insurance IT leader I spoke with recently had these words to say: “I see a lot of organizations that are building around their legacies or are front-ending them with newer technology. Since they're not retiring the legacy system they are still going to have the thought five years from now over should they replace it and how should they replace it.”

There is something to say about short-term gains. These quick fixes certainly are less expensive and can be accomplished in a shorter time frame than a full system replacement project. Given the business pressures all of us are facing and the budgetary problems that have haunted us, it's hard not to argue that a quick-fix strategy is a responsible solution.

But we all know that eventually there will come a judgment day. At that point insurers will no longer have the option to put a new fix on an older fix. That also may come at a point in time where revenues are going up and expenses are leveling out.

Hundreds of companies are betting on that scenario

But as we have come to realize—at least those of us in the private sector—hope is not a strategy. Those in the industry who have addressed a full legacy system replacement are headed in a difficult but brave direction. Those who have opted for quick fixes may think they are staving off the inevitable, but for them the bigger question remains: For how long?

Special Reports /

Political and Insurance Solutions: Delaying the Inevitable

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