For years, MetLife operated like many large insurers—relying on deeply embedded legacy systems that were costly to maintain and slow to adapt. But as customer expectations changed and digital-native competitors entered the market, it became clear that legacy tech was no longer sustainable.
According to Bill Pappas, MetLife’s EVP and Head of Global Technology and Operations, the turning point came with a focus on customer experience (CX). They recognized that modern customers expect both convenience and human connection. This realization sparked a transformation built around two core strategies: “high-take” and “high-touch.” The high-take approach uses automation and digital tools to simplify transactional tasks, like updating policy details or making payments. The high-touch strategy, meanwhile, supports more complex, advisory-driven interactions—powered by technology but rooted in empathy.
To make this work, MetLife needed to rethink its tech stack. That meant moving away from fragmented legacy systems and building an integrated digital infrastructure that supports both seamless automation and personalized service.
This shift reflects a broader trend across the insurance sector. Insurers are now prioritizing cloud adoption, AI-powered tools, real-time data integration, and customer-centric platforms. But new expectations don’t necessarily mean real action – legacy systems often can’t keep up with more complicated features. They lack the flexibility, scalability, and security needed to support these innovations. That’s why legacy transformation has become a central theme in insurance tech.
Here Are Some More Curious Stats That Reflect the State of Digital Transformation in the InsurTech World:
87% of senior business leaders say digitalization is a company priority, but only 40% of organizations have brought digital initiatives to scale, according to Gartner.
68% of insurers plan to increase investments in application modernization to address challenges with outdated systems, according to Deloitte.
70% of insurance IT budgets are spent on maintaining legacy systems, with costs per policy up to 41% higher on these platforms, according to a PwC study.
Insurers with modernized IT are 40% more productive than those with legacy systems, based on total policies managed per employee, according to McKinsey.
Only 10% of large insurers have modernized more than half of their systems, despite the clear benefits of transformation, according to Novarica.
The Insurance Legacy System Challenge
Cloud computing, artificial intelligence (AI), machine learning (ML), blockchain, and Internet of Things (IoT) devices are becoming key drivers of innovation. These technologies enable insurers to streamline operations, deliver more personalized services, and respond faster to market changes. Given that the OG systems can support all that, of course.
Legacy systems that once supported growth are now roadblocks. With decades-old systems powering its core operations, even simple changes become slow and expensive. Customer data is spread across disconnected platforms. Product updates take months instead of weeks. And delivering a seamless digital experience turns into a goal that’s out of reach.
Artificial intelligence and machine learning offer opportunities for faster claims processing, fraud detection, and tailored policy recommendations. Yet, these tools depend on clean, structured data—something legacy systems often can’t provide. Legacy platforms tend to create data silos, where customer and operational information is fragmented across multiple systems. This limits the effectiveness of AI models and delays decision-making.
Blockchain is also gaining traction for secure, transparent claims and policy transactions. However, integrating blockchain solutions into outdated core systems is complex and costly. Without modernization, insurers risk missing out on the trust and efficiency blockchain can bring. Similarly, IoT devices can offer real-time risk data—like driving behavior for usage-based insurance (UBI)—but legacy systems lack the processing speed and connectivity to handle this data in real time.
To keep it short, the gap between what legacy systems can do and what modern technology demands is widening.
Strategies for Legacy System Transformation
So, what to do? To successfully make it to the other side of progress, insurance companies must think strategically and follow these simple steps:
Assess Current Systems
Start with a clear understanding of your existing infrastructure. Identify what’s holding you back and where improvements are needed.
Develop a Clear Roadmap
Create a step-by-step plan for modernization. Prioritize based on business impact and align with long-term goals. Short-sighted decisions like pathing the holes in the system to save certain functionality without considering the bigger picture can be a costly and painful mistake. Previously, we discussed what happened to our client who did just that.
Invest in Scalable Technologies
Cloud platforms and modular systems offer flexibility and long-term growth. They make it easier to integrate new tools and services over time.
Foster a Culture of Innovation
Support change across all levels. Train employees, encourage collaboration, and create room for experimentation.
Consult with Professionals
You need an expert perspective on legacy transformation—someone who can evaluate both your current technology landscape and your business priorities, not just sell you a one-size-fits-all solution.
In this article, we’ve explored a full range of modernization approaches. There are many options available, and it’s important not to stop at the idea of a drastic system rebuild without understanding its pros and cons. Take the time to assess what’s right for your organization before making your next move.
Ensure Data Security and Compliance
Modernize with security in mind. Adopt solutions that meet current standards and protect customer data at every touchpoint.
That Being Said
Don’t be like those 60% of insurers who hesitate to deal with the legacy issue. Hesitation might cost you a lot more than you think, while modernizing your system doesn’t necessarily have to be costly and scary.
At UniRidge, we help insurers break free from legacy limitations with tailored digital transformation strategies. From cloud migration to system integration and modernization, we support you at every step.
Ready to future-proof your insurance business? Contact us to start your modernization journey.
