Background
In a competitive, slow growth environment, management of costs is an imperative for life insurers. With legacy book business often representing up to half the costs on insurers total book, effective management of the legacy book must be addressed as part of any overall cost management programme. However, the complexity of the legacy book environment, built up over many years, frequently means an incremental approach to reducing legacy book costs tends not to be effective. More substantial solutions involving outsourcing and separating the legacy book from the open book, are usually required. But such an approach is difficult for companies to evaluate and execute because it is outside most normal management experience. Taking a rigorous, disciplined approach to defining the options, the preferred solution and transition activities is critical.
In this edition, we take a look at legacy business management and discuss the key issues in determining the right legacy book solution in order to stay competitive.
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