Legacy Modernization in Japan’s Insurance Industry, Part 2: Prescriptions and Proposals

by Eiichiro Yanagawa, June 10, 2016
Other
Asia-Pacific

Abstract

This report draws on a 2015 Celent survey on legacy modernization. More than 60 firms including banks, insurers, brokers, and asset management firms participated in the survey. This new two-part report is an extension of this work and narrows the focus to the insurance sector.

Part 2 offers a deeper look at Celent’s systems legacy modernization survey results with a focus on the insurance industry, considering future developments for the sector based on a firm understanding of the current situation. The report examines systems modernization in Japan in a global context and the strategies that seemingly underpin modernization projects elsewhere.

Specifically, Celent explores what system modernization means to insurers in Japan, discusses why this is the case, and touches upon possible future developments. Ultimately, the report reaches the conclusion that legacy modernization is a synonym for business modernization, and a smart move both in terms of digital and innovation.

“Respondent answers to this Celent survey indicated that they expected modernization to yield more agile business operations and to reduce IT costs,” says Eiichiro Yanagawa, a senior analyst with Celent’s Asian Financial Services practice and author of the report. “How do they expect to make this happen? Celent advocates two propositions; Straight-through processing for insurance office processes, Realizing operational efficiency that extends beyond the system, including office and communication process operations.”

Part 1 provides an overview and summary of the survey results. This report offers policy prescriptions and proposals for industry players.

This report contains 19 figures and two tables.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

 

Key Research Questions

1

 

Definitions

2

Legacy Modernization in the Insurance Industry

3

 

Overview of Insurance Core Systems

4

 

Why Modernize?

5

 

What Does It Mean to Modernize a Core System?

6

Celent’s Recommendations

10

 

Digital Financial Services and Legacy Modernization

10

 

Digital Native Initiatives

11

 

Diversification of Technology Sourcing Models

12

 

Legacy Modernization Framework

13

Proposals for Japanese Insurers

16

 

Landscape and Targeting

16

 

Modernization That Avoids Recreating Legacy Issues

17

 

Globalization of Insurers

22

 

Top Tier Companies Undergoing Transformations

23

Leveraging Celent’s Expertise

25

 

Support for Financial Institutions

25

 

Support for Vendors

25

Related Celent Research

26

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