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Technology legacy is millstone for the sector

Technology problems are worse in the protection market than in any other industry and this is holding back the market, says Sapiens UK managing director Kali Bagary.

In the Protection Review 2006, Bagary says the complexity of existing products added to the creation of new products, which need new systems to administer them, means that IT systems are often slow and inefficient.

Bagary says the biggest challenge that providers face is in replacing or integrating legacy systems and claims that some systems may be more than 30 years old.

He says the FSA is also concerned about the risk to operations due to legacy systems as the data storage and retrieval requirements continue to increase.

Harnessing intelligent technology is the only way the industry can close the protection gap, says Bagary.

He says: “It is a shattering fact that some UK legacy systems are reckoned to be over 30 years old and until we can deal with the problem of replacing them it is going to be very hard.”

Protection Review co-editor Andy Couchman says: “Regulation and pension simplification have sapped resources in the recent past but investment in better IT is leading to more insurers recognising that the way forward is in systems that can help to pilot and test products and allow fast design changes that do not cost millions of pounds and do not take months.”

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