In the insurance industry, legacy backend systems are still a reality. Many of these systems have been running reliably for decades – often on mainframes, using Cobol or PL/I. Instead of replacing them entirely, a growing number of insurers are taking a more pragmatic approach: API encapsulation and replatforming. This allows the core backend to remain in place – while still enabling digital transformation at scale.
Why Replacing the Backend Isn’t Always Necessary
A full system replacement is expensive, risky, and time-consuming. In many cases, it makes more sense to retain the existing business logic and modernize around it:
- 🔒 Reduced operational risk
- ♻️ Reuse of stable data models and domain logic
- 🚀 Faster modernization with lower upfront investment
- 🧩 Easier integration with new digital products and channels
API Encapsulation: The Gateway to Modernization
By introducing an API layer, legacy system functionality becomes accessible through modern interfaces (REST, GraphQL, etc.). This decouples the backend from the frontends and enables integration with portals, apps, partner ecosystems, and automation tools.
Benefits:
- Frontends can evolve independently of the core
- Agile development of new features and services
- Lower dependency on legacy knowledge
Replatforming: Updating the Technical Foundation
Replatforming means moving the legacy system to a modern runtime environment – such as containers, virtual machines, or cloud platforms – without rewriting the business logic.
Objectives:
- 💰 Lower infrastructure and maintenance costs
- 📈 Better scalability and flexibility
- ⚙️ DevOps and CI/CD readiness
- 📊 Improved monitoring and automation capabilities
Target Architecture: A Hybrid Landscape
The combination of API encapsulation and replatforming leads to a hybrid architecture where legacy and modern components work together:
- 🏛️ Backend remains operational as the system of record
- 🌐 APIs bridge legacy logic to new services
- ☁️ Platform runs virtualized or cloud-native
- 🛠️ DevOps practices automate delivery and operations
- 🧩 New digital services run on top via microservices or serverless functions
Conclusion
You don’t always need to replace your core system. With API encapsulation and replatforming, legacy systems can be turned into future-proof components. This approach maintains what works, integrates what’s needed, and transforms the IT landscape step by step – with visible benefits early in the journey.
This is not about a “rip and replace” strategy – it’s about building a modern, flexible, and scalable insurance IT ecosystem on solid ground.
Infographic: Pathways Out of the Legacy Trap in Insurance IT
Here is the translated infographic based on your hybrid strategy:
Flow Steps (in English):
- 🏛️ Legacy remains in place
- 🔌 API Encapsulation
- ☁️ Replatforming
- 🧩 Hybrid Target Architecture
- Backend System
- APIs
- Cloud-native Platform
- Microservices