The cycle of product launches is constant for life insurers and, in tandem, existing product portfolios close at an increasingly rapid rate. Although dormant, these portfolios of “legacy” clients and products still require ongoing maintenance and often reside on older technology, whereas newer products are managed on newer systems.
Managing aging systems and outdated processes to support these platforms is contrasted by diminishing returns from the actual book of business they hold. While the products are dormant, the clients themselves may actually be growing in potential value as they grow older and their assets come to a peak immediately prior to retirement. In many cases, these assets are spread across a few providers accrued over the years. If a client receives a “legacy” service with one life and pensions provider, they may opt to consolidate their investments with a provider that gives them a better level of engagement and access to newer products. This presents a very real opportunity risk.
Life and pensions providers should be looking to provide a consistent experience for all customers, regardless of the products they purchased. The goal of increased automation and digitization should not be limited to newer clients. However, overhauling older platforms may not be realistic, and likely wouldn’t deliver results for upwards of a year. This approach simply isn’t practical. So what can firms do to avoid playing a constant game of cat and mouse, and to extract full value from their client book?