In a market that calls on insurers to be agile and digitize at scale, an insurer’s mainframe can either catalyze or inhibit progress. While the mainframe was once a valuable core technological function, many legacy mainframes lack the agility to meet the demands of customer expectations and rapid digital progress. The call for mainframe modernization Insurers want to reach a digital end-state and embed the enabling functions they need to perform in the cloud using a route that is faster, better, and cheaper. Modernizing the mainframe is the last mile towards enabling business capabilities, reimagining the business and driving a cloud operating model. If we look at the market forces shaping the wider industry, insurers are being called upon to be more agile so as to keep pace with rapidly changing demands. This is due to a range of factors, from higher inflationary environment expenses for insurance operations and increasing claims, to the impact of the global pandemic and predicted recession. With a high-interest rate environment and future predicted volatility, costs need to come down, and one of the costs that is increasing year over year is maintenance of the mainframe. Zooming in on sectors within insurance, this need for agility is manifested in different ways. Property and Casualty (P&C) insurers not only need to be more agile, but need to focus on marketing points of differentiation while commoditizing non-differentiators. The Life & Annuity (L&A) and Retirement industry will benefit from unlocking distribution, a feat which is currently not possible because a lot of that logic is embedded in the mainframe. Therefore, the focus is on modernizing the mainframe to enable digital channels. Group and Retirement insurers are undergoing a compressed transformation – meaning that the sector requires reimagined operations from the ground up in order to improve customer relationships and gain a competitive advantage – with Group hurting on margins, and Retirement hurting on margins and scale. Finally, Group and Health insurers are being challenged to drive down the cost basis, and drive growth, for example, by adding a wellness layer to their offering. From a cost perspective, the case for mainframe modernization is clear. The demand placed on the insurance infrastructure is increasing, with business capability needs driving up Million-Instructions-Per-Second (MIPS) usage and cost. A legacy mainframe also has an impact on talent, as dedicated staff will be required to provide maintenance and upkeep – a diminishing skillset as more and more senior employees retire from the workforce. Down the line, this manifests as a considerable business risk.