How would you describe the following situation? An insurance carrier has a mainframe legacy system that is anywhere from 20 to 30 years old and is written in technologies for which the skill pool is rapidly diminishing. Over the next decade such a scenario will become a crisis in the insurance industry, according to Rod Griffin, director of insurance systems for WorldGroup Consulting. A lot of the old systems really are struggling to meet business demand because of the inherent design restrictions they have, he says. A lot of the [old systems] arent even real time across the board.

Larry Erb, CIO of ING Re, doesnt believe mainframe systems are the culprit because they are still doing the job in a number of companies, particularly for those with high transaction-volume processing. But he agrees with Griffin that legacy systems are reining in future growth. Our legacy systems were a constraint on business growth and required increasingly expensive IT support, he says. Those were the driving forces behind ING Res legacy replacement project.

No one involved in such a project ever describes the process as simple, but significant benefits are attainable for a company willing to take the riskboth on the IT side and the business side. Being in an industry that understands risk better than most helps in some ways, but there is no disputing an unsteady economy can cause carriers to delay the inevitable as long as possiblebut not forever, at least not without losing ground competitively. So whether an insurer is considering this kind of project now or when economic conditions improve, here are eight tips from the trenches, culled from the voices of experience.