This report highlights a conversation I have been having increasingly with claims specialists over the last 12-18 months. Why?

The last 5 years has seen an explosion in this Cinderella side of the business finally getting money to replace their old FORTRAN and COBOL systems - some of them 30, 35 and even in one case 40 years old. Yes, it is well overdue.

However, what has disappointed me is the rush to spend very significant budgets (in some cases £10m's) replacing these legacy Claims Admin Systems (CAS) with replacements written in Java. This is a calamitous mistake! I have never seen one of these projects resulting in an improvement in COR or improving the business performance.

The smart money is now all going into Two-Tier architecture. This leaves the old CAS in place, puts a new intelligent platform on top to wrap, enhance and deal with all customer interaction. The work is moved, process by process (reduces the risk), into the new platform and the old CAS is reduced to a repository for claims and payment, waiting for a simple, low risk swap out later.

That way insurers can realise the vision of Humans taking control of the intelligent aspects of the claims process and being served by IT systems which remove low value tasks through high automation, augment decision making via AI and serve them to provide high quality service to policyholders.