Across the insurance industry, there is no shortage of discussion about the limitations of legacy core systems and how unfit they are for today’s digital world and the AI world rapidly coming upon us.
These are important conversations, but they must be discussed in the context of organizational change and the future-state business model, because while technology can become legacy, so too can people skills, mindsets, leadership approaches, and that is where the real risk lies. People who want to cling on to the past, or worse still, reinvent it in future systems.
At a recent Insurtech.ie event, I explored this topic during a panel discussion alongside AXA and Insurance Skillnet, where we discussed how insurers can balance technology transformation with the need to evolve leadership, skills, and culture. One theme that emerged throughout the discussion was how legacy systems can contribute to legacy thinking. Not because people lack capability or ambition, but because over time organizations can become comfortable with the familiar. Processes become established, assumptions go unchallenged, and experience can unintentionally become a reason not to change.
The result is not just ageing, expensive and unfit technology; it is an organization that finds it harder to attract new talent, adopt new skills and embrace new opportunities.
This challenge is already visible across the employee benefits and life, accident, and health insurance industry. Recent insurance workforce research found that the percentage of insurance professionals who would recommend a career in the industry has fallen from 85% in 2021 to 65% in 2024. Other research has shown that eight in ten millennials have limited knowledge of career opportunities in insurance.
For an industry built on expertise, relationships, and trust, that should give us pause.
Years ago, the vast majority of new starts joining insurance companies knew they were going into administration, finance, actuarial or sales. There’s a lot less ‘administration’ required with a modern core system today, which should be viewed as an opportunity for people to see their role change as hands on support of customers and families who need protection, customers who they can advise and help in their moments of need and crisis.
The future of employee benefits depends not only on modern systems, but also on whether we can create modern, compelling environments where people want to build their careers.
Today’s conversations often focus on AI as the answer to legacy challenges. Certainly, AI has enormous potential when used safely and correctly. It can improve productivity, enhance decision-making, and help organizations extract more value from their technology investments.
Recent commentary has suggested that agentic AI could help modernize insurance core technologies by capturing legacy knowledge, reducing dependency on subject matter experts, and improving productivity across parts of the modernization process. That is an exciting development. But it is not the whole answer.
While AI is embedded in modern core systems and other modern systems throughout the enterprise, it cannot modernize culture, it cannot foster curiosity, it cannot build future leaders, it cannot create human trust, and it cannot replace the value of bringing together experienced industry professionals and new generations of talent with fresh perspectives and emerging skills.
In fact, if organizations use AI simply to wrap around old systems, processes, and outdated ways of working, they risk creating a new layer of expensive inefficient technology on top of legacy thinking. That is why leadership really matters – leaders are people who see the future and can help people to understand and constantly communicate the why, how, what, and when.
Deloitte’s 2024 Global Insurance Outlook notes that insurers’ shift toward more customer-centric models will require advanced technology adoption, but also changes to company culture, stronger collaboration, and augmented skill sets.
That is the real transformation challenge, it is people who are at the heart of it, and it is people who will benefit from it. This is the outcome and result we all want.
The insurance organizations that will thrive over the next decade will not necessarily be those with the newest and/or the biggest and most expensive technology investment programs. They will be those that successfully combine deep institutional knowledge with continuous learning, supported by modern capabilities. The ones willing to challenge established ways of thinking who are willing to change for the better ways.
Experience remains one of this industry’s greatest assets and strengths. But experience becomes even more powerful when it is paired with curiosity, adaptability, and new skills.
That fusion is where innovation happens, the magic.
At FINEOS, we see this every day. As an employer, we focus on attracting, developing, and retaining people who bring diverse experiences and perspectives. As a partner to employee benefits and life, accident and health insurers, we see similar challenges across a complex but vitally important industry, one where organizations must balance transformation with the realities of sustaining a vitally important, mission-critical, regulated business operation.
We also believe AI should not be treated as a separate layer of innovation that sits outside the core system supporting a modern business operation. It should be embedded thoughtfully and safely to maximize insights from the data in the core system, while simplifying and automating enterprise workflows and experiences (for users, partners, and customers) to help people become more effective.
Technology transformation matters. AI matters. Core modernization matters. But leadership transformation matters more. Because ultimately, your legacy will not be defined by the systems you inherited, built, or implemented. It will be defined by the culture you create the talent you develop, and the future you enable.
Don’t let your legacy be your legacy.
