Stop Adding to the Tech Heap

Agility is necessary for new product launches and to reduce operational costs, but insurers are hamstrung by a heap of legacy systems that stop them from keeping up with their own ambitions, writes Bart Patrick, managing director of Duck Creek Technologies Europe (DCTE).

Picture all the hardware, software, technology and systems in use at a typical insurer as a physical structure. What would it look like?

There would be a smartly-painted frontage and maybe a loft extension for storage and a shiny conservatory for guests. But there would also be rotten beams, creaky floorboards, leaky pipes, and perhaps a few degrees of subsidence.

The picture is less an elegant country pile and more an unruly heap. Unfortunately, too many general insurers have built their technology houses in such a way, so that the stack  built up over time has left insurers’ technology unwieldy rather than agile.

The tendency is not to replace things but to add new levels to the heap. Insurers have been sticking on pieces of technology that masquerade as modern but are inflexible. Further down the heap some still rely on legacy green-screen systems that simply cannot keep up.

Efficiency drag

When the business wants to launch a new product, tasks of core administration and product linkage create a drag. The resulting inefficiency adds costs and can sour customer experience.

Some new technologies claim to be configurable, but in fact they insist on out-of-the-box functionality. When the technology vendor says configurable, they really mean coding. That can add time and cost.

When launching a new line of business, it’s a rude awakening when the systems provider turns around and tells you it will require a further €750,000 fee just for them to wire it in. That’s the wrong answer. It should be in place next week, or you should walk away from that vendor.

We don’t think you need to provide everything in the same manner, but rather to have an open platform that can assimilate it all. The cost of upgrades can be substantial, and if you choose to skip a patch because of time or cost constraints, that just kicks the issue into the long grass and your software creeps out of sync with the provider. We think if there are new upgrades be made, that’s our problem, not yours.


Without end-to-end technology in place, it can be hard to understand how a newly launched product is performing. This can lead to major problems for the business, from what might have been quickly corrected as teething troubles. Once the business finds out, it can be even harder and more time-consuming to make a correction.

Insurers in Europe often face such problems, because historically they have tried to develop their own software, which now struggles to connect and remain compatible with newer additions.

The answer is to start again. This can be culturally unpalatable, but so is throwing good money after bad. The industry faces high operational costs, uncompetitive expense ratios, and a looming threat of disruption to the business model. The core business of underwriting is being undermined by inefficiency. Enough is enough.

For European insurers, DCTE already provides core administrative systems, connecting customer-facing platforms at the front with claims and data at the back. We operate as Software-as-a-Service, on-demand and hooked up to the MS Azure cloud.

Berkshire Hathaway Specialty Insurance is one of our better-known international clients. The insurance company has used our technology globally to help it launch over a hundred new products into the market over the last few years.

Many insurers are likewise looking to new markets and new products, but they would struggle to be as nimble at turning good ideas into successful products. It might be unpalatable to acknowledge it, but you can’t be competitive while you still rely on a heap of clunky technologies. The only way to compete is to be agile.

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