Why is Life Insurance losing relevance? Let’s stop blaming legacy systems: the real trouble is legacy thinking.

 Life insurance has been in a state of “transformation” for years now. New systems, digital portals, agile teams. Yet, here we are in 2025:  

• Growth is almost flat: between 2007 and 2023, life insurance penetration in mature markets dropped from 5.4% to 3.6%1. 

• Customers are dissatisfied: around 50% of policyholders report poor experiences at every stage of the journey, from onboarding to payout2. 

• Agents and advisors are frustrated. They’re stuck between legacy systems, often more than one, and increasing pressure to deliver more with less. 

• Most policy journeys still feel like they belong to a different era, with 52% of insurers identifying legacy systems as “a significant hurdle”. 

It’s not that the industry doesn’t invest. It’s that it keeps investing with the wrong mindset: legacy isn’t (just) the tech, it’s the way we think. Too many insurers still treat digital transformation like a checklist:

☐ Patch the legacy core 

☐ Launch a new onboarding flow 

☐ Add a chatbot 

But Life insurance is a business built on long-term trust and, right now, it’s losing relevance not because people don’t care or don’t need protection, but because the experience feels detached from real life. People live longer and retire later, financial priorities shift faster than products can adapt, customer expectations are shaped by Netflix, Amazon, not call centers and paper forms. So consumers, especially younger ones, don’t see the real value.  

This is a customer experience gap so wide it threatens the viability of the entire Life business and here’s the truth: the technology to close the gap is already here, but what’s missing is the courage to change how we work. 

Three uncomfortable realities (and what to do about them) 

• Your agents, advisors and distributors are your first customers.  If they need five tools to create a quote, they can’t explain it clearly or track a policy without opening 6 screens, they won’t sell and people won’t buy. Modern tools should free them to be advisors, not turn them into system navigators. 

• Your customers don’t want insurance. They want outcomes.  They want peace of mind, flexibility, control. If your onboarding still takes days and requires printouts, you're not just slow, you're irrelevant. Customers expect to handle their policy like their bank account. Yet more than 20% reported inability to self-service policy changes as one of the top three service challenges3. That’s not empowerment. 

• Digital journeys (or digital portals) are not digital transformation.  Putting a self-service front end on top of a fragmented back end is like putting a touchscreen on a fax machine. Adding a chatbot won’t solve structural inefficiency. The experience has to be consistent, real-time, and make sense across all channels. A truly modern Life insurer must operate with a unified digital core, one that connects onboarding, servicing, claims, distribution, and analytics. No silos, no workarounds. 

So what’s the real move? 

1. Standardize what doesn’t differentiate you and simplify your stack. Seriously.  The “Frankenstein” effect of bolting tools onto aging cores is not sustainable anymore. Products, policy admin, compliance updates… make them modular, configurable, repeatable. Not just to reduce costs, but to unlock innovation.  
2. Personalize what matters: the advisory layer, the onboarding, the customer relationship. Use real-time data and low-code tools that let you respond to life events, not just process documents.  
3. Stop building systems around your processes or org chart. Don’t digitize the mess but redesign it from the customer in. And yes, that means breaking silos among lines of business, IT, compliance, distribution, all of them. 

And most importantly:

1. Empower people, not processes. The best systems are the ones that get out of the way and don’t automate empathy. AI and automation can make things faster, but human touch still matters. The best insurers combine intelligent platforms with emotionally aware interactions. That’s what turns a transaction into trust. 

Want to stay relevant? Build for relevance.  The competition isn’t just other carriers, it’s every service that taught your customers that instant, transparent and digital is the new normal. And that means we need to simplify the complex, rethink the familiar, let go of what once worked. 

To this, the industry doesn’t need more digital projects. It needs a digital foundation. One that’s flexible, compliant, scalable and yet deeply human.  

Something better, from the core.