The ROI of replacing legacy policy systems – Business case for modern PAS 

Traditional core insurance systems cost companies millions because of their complex, mostly manual processes, missed opportunities, and compliance penalties. Today, modern modular policy administration systems offer a much better solution for mid-sized insurers. 

Here, we will discuss why legacy core insurance systems have hidden costs and hinder operational efficiency. At the end of the article, you will find a real case study of implementing a modern policy administration and how it impacted the business. 

The hidden costs of legacy policy systems 

In our latest article, we have already outlined the top 5 reasons why outdated core insurance systems deter digital transformation, innovations, and operational efficiency. In brief, the challenges include the following:  

• Difficulty launching new products with legacy policy administration systems  
• Limited capabilities to integrate modern technologies with outdated systems  
• Fragmented and siloed data that can’t be properly used for analytics  
• A large share of IT costs is spent on system maintenance 
• Resistance of insurance organizations relying on legacy software to change  

Together, these issues create “hidden costs” that go far beyond system upkeep, showing up across operations, speed to market, and risk exposure:  

• High costs of technical support and maintenance  
• Manual work and operational drag  
• Slow insurance product launches  
• Missed market opportunities  
• Dependency on software developers   
• Compliance and regulatory risks  

Thus, although a legacy system looks reliable because it rarely “breaks,” it still slowly destroys return on investment (ROI). Firstly, the costs of keeping it running are high. Secondly, it prevents businesses from making or saving money.  

  

What modern policy administration systems change  

With technological evolution, modern policy administration systems have become more dynamic and agile. Built on a modern tech stack, they give users greater flexibility to configure their own systems, reducing dependence on developers.   

Implementing a modern PAS can deliver significant benefits, transforming how insurance companies operate day to day. So, what are the key changes?  

• Faster product launches. You can launch new products faster, reacting to customer demands quicker than your competitors, using outdated systems.  
• Lower operational costs. Every day, operational costs are reduced as employees spend less time on routine tasks and paperwork.  
• Greater readiness for innovation. You are ready to innovate because modern PAS can integrate with modern technologies like AI, IoT, ML, and advanced analytics.  
• Improved customer experience. Your customers are happier as modern PAS usually supports self-service when customers make instant changes in their policies without making calls to agents.  

These changes directly impact efficiency, scalability, and customer satisfaction—three core pillars of long-term business performance.  

ROI drivers of a modern PAS 

The return on investment from a modern policy administration system is driven by several interconnected factors:  

• Maintenance and support costs are lower. 
• Operational efficiency improves through automation.  
• New insurance products are launched faster. 
• Data quality and accessibility for analytics and decision-making are improved. 
• Compliance and regulatory risks are lower. 

Together, these drivers shift spending away from simply “keeping the lights on” and toward activities that actively generate value.  

Payback timeline: When ROI becomes visible 

Although the exact payback timeline depends on organizational size, complexity, and implementation approach, ROI from a modern PAS typically becomes visible once operational efficiencies, reduced maintenance costs, and faster product launches begin to materialize.  

Over time, insurers move from absorbing the hidden costs of legacy platforms to realizing measurable financial and strategic gains — transforming their policy administration platform from a cost center into a true business enabler. 

DICEUS case study: Quantifying the ROI of implementing a modern Policy Administration System

Modernizing a legacy Policy Administration System (PAS) is often perceived as risky, expensive, and disruptive. This enterprise case study demonstrates that, with a configuration-first, modern PAS approach, ROI can be rapid, measurable, and transformational. 

Starting point: The cost of legacy PAS 

The insurer in this case was a multi-program carrier operating across commercial and specialty lines, with more than 10,000 active policies and over 40 insurance programs. Its legacy PAS environment created structural inefficiencies: 

• 60–70% of policy changes handled manually, driving high operational costs and error risk 
• Policy-by-policy renewals limited scalability 
• Even minor product or mid-term adjustment changes were dependent on IT heavily 

Processing 90,000 to 120,000 policy versions annually, including MTAs, renewals, and in-term changes, these inefficiencies led to increased operating expenses and missed market opportunities. 

The modern PAS initiative 

The insurer replaced its legacy system with a modern, configuration-first platform designed by DICEUS to support high product variability and frequent change. 

Scope and complexity 

• 10,000+ active policies at go-live 
• 40+ commercial and specialty insurance programs 
• 150+ Mid-Term Adjustment (MTA) scenarios 
• 10–15 configurable coverage structures per product 

Despite this complexity, the program reached go-live in just 4 months, significantly faster than typical enterprise PAS transformations. 

Delivered capabilities that drove ROI 

The new PAS fundamentally shifted how work was done: 

• Configuration-first, low-code setup, reducing IT bottlenecks 
• End-to-end MTA lifecycle management with versioning and audit trails 
• Portfolio-level bulk operations for renewals and mass changes 
• Automated document generation for policies, MTAs, and certificates 

These capabilities enable business teams — not developers — to control products and changes directly. 

Measurable operational impact 

The financial and operational returns were immediate and significant: 

• Time-to-change reduced from 8–16 weeks to 3–5 business days. 
• 85–90% of MTAs are configured by business users. 
• Bulk renewals were reduced from weeks to hours. 
• Manual processing was reduced by 65–75%. 

Beyond efficiency gains, implementation and ongoing change-delivery costs were estimated to be 4–6× lower than those of traditional PAS programs, dramatically improving the total cost of ownership. 

The ROI takeaway

This case study demonstrates that replacing a legacy PAS is not just a technology upgrade — it is a business investment with fast, compounding returns. When insurers move from manual, IT-heavy systems to a modern, configurable PAS, they unlock: 

• Faster speed to market 
• Lower operating costs 
• Greater organizational agility 
• Sustainable long-term ROI 

For carriers struggling with legacy policy systems, the business case for modernization is no longer theoretical — it’s measurable, repeatable, and compelling.