Strategies for De-Risking Data Migration to Enable Policy Admin Modernization

Strategies for De-Risking Data Migration to Enable Policy Admin Modernization

By Brian Carey, Senior Director - Insurance Solutions at Equisoft - 16 April 2024

“The strategic outcome of PAS modernization should be to achieve a transformation‒in order to become digital, flexible and faster to market. But that transformation just hasn’t happened until the lights are turned off on your legacy systems for good. And that means migrating your legacy data off those old platforms.”


What are the Benefits of PAS modernization?


Celent’s “Using Artificial Intelligence to De-risk Life Insurance Conversions – A ‘Conversion Service Provider’ View” report highlighted that the drivers for Policy Administration System modernization have been evolving. Insurers are no longer solely focused on IT expense reduction but see modernization as a strategic imperative. They seek to expand their ability to meet business objectives around digitalization, accelerated go-to-market capabilities and increased flexibility.


As the chart below reveals, respondents found far more than value in flexibility and enhanced digital services gains than they did from pure cost reduction.



“The problem is, no company can claim to have modernized or achieved true digital transformation while the old policy admin systems housing legacy data are still running.”


Green field PAS modernization is a workaround, not digital transformation


Given the benefits of modernization, many life insurers are standing up systems with modern capabilities more quickly, by taking a green field approach to PAS modernization. But, while green field is a great way to kick-start your transformation with lower effort and less risk, it can also be a limiting, shorter-term solution.


The green field approach results in the old and new systems continuing to run in parallel, with the legacy data still housed in the old systems‒unable to be leveraged for integrated digital sales and service solutions or many analytics uses. Running old and new systems in parallel does not bring the expected benefits of modernization.


Do you want to add another PAS to your IT landscape, or do you want to transform?


Ultimately, true modernization requires data to be migrated from the legacy system to the new PAS so that the old platform can be retired. Only once the lights are turned off on the legacy PAS and data resides in the target system is it possible to take full advantage of its automation, accelerated development, flexibility, and ability to integrate APIs to leverage all of your data.


Data migration comes with both real and perceived risks 


The case for data migration as part of a PAS modernization is compelling, and yet executives still balk at the notion. Many believe data conversions carry risk.


“It’s common to hear the refrain “conversions are risky, expensive, and are never on-time!” Well, Celent wanted to know if the caution is still warranted. The survey they conducted for this report is clear: there are significant risks—94% of respondents experienced a material delay.”


-Celent, Using Articial Intelligence to Derisk Life Insurance Conversions – A ‘Service Provider’ View”



Common concerns that prevent organizations from enacting data migration projects include:

  • Data security
  • Data corruption
  • Threat of business interruption


From an internal POV, risks highlighted in the Celent report include:

  • Surprises discovered during legacy system conversion or new system configuration
  • Insufficient data skills for the specialized demands that all conversions entail
  • Constrained expertise because critical legacy knowledge remains with a shrinking set of people
  • Challenging governance and change management


How to eliminate risk in your data migration


The good news is that all of these risks can be managed, even eliminated, if a carrier is able to objectively audit their own internal capabilities and address potential gaps.


“Conversion projects are unique in many ways and require capabilities and skills that are not exercised on a regular basis by most organizations.”


-Celent “Using Artificial Intelligence to Derisk Life Insurance Conversions – A ‘Conversion Service Provider’ View”


Since most companies have limited data migration experience and expertise, they expose themselves to data risk if they attempt an in-house conversion. Even in the planning stage, organizations attempting an in-house conversion effort will tend to treat data migration as an IT project rather than a strategic business initiative. They often underestimate the scope of the task they are undertaking‒which can unfold over several years, involve significant change management and affect many functional areas within the company.


Build bridges to critical business leaders and their needs


In order to reduce risk exposure from the beginning it is critical to obtain buy-in to the data migration project from all executives whose functions will be affected. Sponsors can include all of those who will be impacted by planning, resourcing, and change management. It is especially important to get support from those stakeholders who will need to commit high-value SMEs to the project.


As the project evolves it is likely that business needs, resource requirements, timing and even costs may change. Issues arising from these changes will be mitigated if senior management and all stakeholders have been involved from the beginning.


The importance of data migration partners


In order to ensure success, companies who lack familiarity and expertise in data migration will partner with experienced data conversion vendors. Engaging this type of 3rd party expertise will:


1. Close gaps in data migration experience

The right partner will have experience that the carrier lacks. In addition, their bespoke conversion tools and a robust methodology based on what they have learned from many migrations can greatly reduce risk in any conversion project.


2. Bring deep understanding of your legacy platform

Since these vendors work with data, legacy and target systems every day, they should have specific experience with the particulars of your core system‒and will be better equipped to completely understand the rules, calculations and assumptions related to your legacy PAS. This is critical, because old legacy systems often have inconsistent documentation and IT departments frequently rely on a few, in-demand-staff who carry the institutional knowledge about the system.


3. Contribute specific data expertise and tools

Data migration partners will have dedicated expertise in every step of a data transformation project, including:

    • Initial study and planning
    • Data sampling and discovery
    • Validation and migration
    • Data transformation and integration

This expertise should be supported by a tailor-made data toolkit, designed specifically to increase speed and accuracy of migrations. This kind of solution would include tools that:

    • Are designed to work with legacy technology and proprietary data formats
    • Identify target system data attributes and automate key repetitive migration tasks
    • Include reporting modules that expedite transformation, QA and testing process that are essential to rapidly refining transformation logic

Putting it all together


Removing data migration risk from your critical path is contingent on thorough planning, stakeholder buy-in, and understanding the strengths and weaknesses of your organization when it comes to data conversion experience, expertise and tools.


Data migration partners can bridge identified gaps in migration experience and can be invaluable, even before the project begins. Many can conduct audits or studies of your legacy environment and requirements. This kind of due diligence is invaluable in building the business case, understanding potential risks and obtaining buy-in.


Effective planning and engagement of a partner that specializes in data migration can remove conversion headaches and ensure that your legacy systems are retired. Achieving your goal of transforming your IT landscape to enable greater flexibility and increased ability to meet business needs depends on your organization’s ability to take this type of strategic approach to data migration.


To find out more about taking data migration risk off your digital transformation’s critical path check out our next Accelerate webinar: How to Build Data Foundations for a Digital Insurance Future.

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