P&C insurers stuck with costly legacy tech, McKinsey warns

Legacy platforms are driving up IT costs and limiting operational agility.

Property and casualty (P&C) insurers must make strategic choices to modernise aging core systems that no longer meet digital-era demands, according to McKinsey & Company. 

Legacy platforms are driving up IT costs and limiting operational agility, whilst customer expectations continue to rise.

The report outlines three main approaches: building custom systems, upgrading legacy platforms, or adopting off-the-shelf solutions. 

Each path carries trade-offs in cost, control, and scalability. 

Notably, more insurers are shifting away from full custom builds in favor of configurable SaaS options or enhanced legacy systems.

McKinsey emphasises that modernisation must be driven jointly by business and IT leaders.

Aligning technology upgrades with redesigned business processes is key to realising efficiency gains, better customer service, and long-term cost savings.