In recent years, insurance companies have been exposed to a lot of challenges. These make them reflect on serving their customers that have been a client for many years and years to come. Life insurance contracts are typically underwritten for a very long duration and in times that technology and legal requirements were very different from today. Technological solutions also become outdated after a while and the experts that knew everything about those old products or systems are increasingly retiring. Because of these evolutions companies are either migrating their legacy portfolios to newer systems or are selling these to other parties that consequently move these portfolios to their systems.
The essence of a migration is the transfer of the data from one (old) management platform to another (new) management platform. It is said that the data must be extracted from the source system, then transformed so that it can be uploaded into the target platform. The migrated life insurance contracts are then further managed on the target platform.
The art of migrating is to ensure that ultimately all parties involved benefit from it. After the migration, the life insurer should be able to offer a preferably better service at a preferably lower management cost.
We take the position that this goal can be achieved by not only migrating life insurances data-technically. In many cases, it is best to also renew the underlying life insurance technique of the life insurance contracts, so that the migrated life insurance policies are more in line with the calculation and management techniques of the target management platform. The contractual rights of policyholders or beneficiaries must not be prejudiced. After all, a life insurance contract cannot be unilaterally changed by an insurer at any point, certainly not because of a migration to a new management platform.