Pull the Plug on your Legacy System: A Guide for Insurers & Brokers

In the fast-paced world of insurance, staying ahead of the curve is paramount. Yet, many providers and brokers find themselves bound to legacy systems, hesitant to make the switch to modern systems. This reluctance can stem from various factors, however, clinging onto obsolete systems can slow growth, jeopardize competitiveness, and ultimately impede success. Break free from the chains of legacy systems and embrace change.??

Here's how:

1) Remove Emotions from Your Decision?

One of the biggest barriers to transitioning away from legacy systems is emotional attachment. After years of reliance, it's natural to develop a sense of familiarity and comfort with the existing setup. However, decisions driven by sentiment rather than strategic vision can be detrimental in the long run. To overcome this hurdle, remove emotions and objectively evaluate the performance and capabilities of your current system.??

2) Sunk Cost Fallacy: Don't Think About What You've Already Spent?

The sunk cost fallacy is a bias that leads individuals & organizations to continue investing in a failing endeavor simply because they've already put resources into it. When it comes to legacy systems, this fallacy often manifests as reluctance to abandon investments already made.? Thinking about past expenses only blinds you to the opportunity cost of maintaining outdated systems. Instead, focus on the future benefits and potential savings of embracing modern solutions.?

C) Embrace Change Management?

Change is inevitable. Think we can all agree the insurance industry is due for change.... For perspective, look at how the banking industry has changed in the last 20 years. Why worry about “the headaches” changing systems would temporarily cause???

Effective change management involves preparing your team for the transition, addressing concerns, and providing adequate support throughout the process.??

While it is natural for employees to resist change initially, emphasizing the long-term benefits and offering training can alleviate apprehensions. Remember, the temporary discomfort of change pales in comparison to the long-term gains it can bring.?

D) Ask Yourself a Question?

Imagine you're starting your business from scratch today.

"Would you choose the same?system you are currently using?"

This simple yet powerful question forces you to reevaluate your technological needs and priorities in the context of today's competitive landscape. Legacy systems often have:?

• Limited functionality?
• Don’t connect to other systems?
• High maintenance costs?
• Outdated user interface?
• More security risks?

If the answer is No, it's time to seriously consider alternatives that align with your present-day requirements and future ambitions.?

E) Adopt an 'Evolve or Die' Mentality?

In the insurance industry, stagnation is synonymous with regression.? To thrive in a rapidly evolving landscape, organizations must embrace innovation and adapt to the current climate. Those who don’t are usually the ones who are desperately looking for a buyer.??

Have you noticed the market consolidation happening in the provider & broker industry???

View your tech & systems advancement as survival imperative.?

F) Consider the Alternative?

Perhaps the most compelling argument against maintaining a legacy system is the alternative—doing nothing.??

While the upfront costs and challenges of system migration may seem daunting, the consequences of inaction can be far more severe:?

• Slowly becoming irrelevant?
• Company devaluation?
• Inefficiencies and operational bottlenecks?
• Compromised security?
• High employee turnover, low morale, becoming a steppingstone job?

The risks of clinging onto obsolete technology far outweigh the perceived benefits.?

G) Coin Trick Method?

1) Find a coin.??

2) Heads = stay with your current system.??? Tails = look at changing?

3) Flip coin?

In the split second that coin is in the air, before it hits your hand, you'll already know what the right decision is.??

So what’s holding you back??

Conclusion?

The decision to pull the plug on your legacy system is not merely a tech upgrade but a strategic imperative for your company’s future.??

Did this article resonate with you????Let's chat

Onwards & Upwards,

Quinn Miller | Tech & Systems Consultant

Insurers ? Brokers ? Financial Services

[email protected]