{"id":24073,"date":"2026-03-16T10:30:41","date_gmt":"2026-03-16T03:30:41","guid":{"rendered":"https:\/\/fpt-is.com\/en\/?post_type=goc_nhin_so&#038;p=24073"},"modified":"2026-04-15T11:27:59","modified_gmt":"2026-04-15T04:27:59","slug":"insurance-core-transformation-a-safe-path-from-legacy-core-to-real-time","status":"publish","type":"goc_nhin_so","link":"https:\/\/fpt-is.com\/en\/insights\/insurance-core-transformation-a-safe-path-from-legacy-core-to-real-time\/","title":{"rendered":"Insurance core transformation: A safe path from legacy core to real-time"},"content":{"rendered":"<p><span style=\"font-weight: 400;font-family: arial, helvetica, sans-serif\">Insurance core transformation has become a strategic imperative for insurers in Vietnam. According to a survey by Vietnam Report, 98.7% of insurance companies increased their digital investment in 2025 &#8211; among which core system modernization is identified as the most costly and highest-risk initiative.<\/span><\/p>\n<p><span style=\"font-weight: 400;font-family: arial, helvetica, sans-serif\">This article examines a pragmatic roadmap for insurance core transformation: why a phased, risk-controlled approach is more effective than a \u201crip-and-replace\u201d strategy, and which modules organizations should prioritize first.<\/span><\/p>\n<h2><span style=\"font-family: arial, helvetica, sans-serif\"><b>Why does insurance core transformation no longer be delayed?<\/b><\/span><\/h2>\n<p><span style=\"font-weight: 400;font-family: arial, helvetica, sans-serif\">The pressure to modernize core systems is driven by three structural forces, not a passing trend:<\/span><\/p>\n<p><a href=\"https:\/\/cdn.fpt-is.com\/en\/sites\/3\/2026\/04\/Table-1.-Comparison-between-traditional-core-architecture-and-modern-hybrid-architecture-1776226496.png\"><img decoding=\"async\" class=\"aligncenter size-full wp-image-24074\" src=\"https:\/\/cdn.fpt-is.com\/en\/sites\/3\/2026\/04\/Table-1.-Comparison-between-traditional-core-architecture-and-modern-hybrid-architecture-1776226496.png\" alt=\"Table 1. Comparison Between Traditional Core Architecture And Modern Hybrid Architecture 1776226496\" width=\"1280\" height=\"500\" srcset=\"https:\/\/cdn.fpt-is.com\/en\/sites\/3\/2026\/04\/Table-1.-Comparison-between-traditional-core-architecture-and-modern-hybrid-architecture-1776226496.png 1280w, https:\/\/cdn.fpt-is.com\/en\/sites\/3\/2026\/04\/Table-1.-Comparison-between-traditional-core-architecture-and-modern-hybrid-architecture-1776226496-700x273.png 700w\" sizes=\"(max-width: 1280px) 100vw, 1280px\" \/><\/a><\/p>\n<p><span style=\"font-weight: 400;font-family: arial, helvetica, sans-serif\">Customer expectations have fundamentally shifted. Users are accustomed to instant payments via e-wallets and booking rides in under 30 seconds. When an insurance quote still takes 2-3 days, the experience gap becomes untenable.<\/span><\/p>\n<p><span style=\"font-weight: 400;font-family: arial, helvetica, sans-serif\">Competition from insurtech and digital bancassurance is intensifying. In 2025, the Vietnamese market saw the entry of new players such as TechcomLife and AlphaRe &#8211; bringing technology-first approaches and advanced risk management capabilities. Traditional insurers can no longer rely solely on brand strength as experience gaps widen.<\/span><\/p>\n<p><span style=\"font-weight: 400;font-family: arial, helvetica, sans-serif\">Regulatory requirements are accelerating digitization. Decree 46\/2023 and Circular 67\/2023 raise the bar for auditability, process control, and reporting. When implemented correctly, modern technology becomes an enabler of compliance, not a risk.<\/span><\/p>\n<h2><span style=\"font-family: arial, helvetica, sans-serif\"><b>Why are operations staff concerned about \u201ccore transformation\u201d?<\/b><\/span><\/h2>\n<p><span style=\"font-weight: 400;font-family: arial, helvetica, sans-serif\">Understanding the concerns of experienced insurance professionals is essential to designing the right transformation path. Legacy batch systems running on mainframes may be slow, but they have delivered operational stability for decades. A technical failure is not just a software issue, it can result in thousands of policies being disrupted, delayed claims processing, and reputational damage.<\/span><\/p>\n<p><span style=\"font-weight: 400;font-family: arial, helvetica, sans-serif\">Four common concerns in core modernization projects include:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400;font-family: arial, helvetica, sans-serif\">Operational instability when modifying systems that are currently stable<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400;font-family: arial, helvetica, sans-serif\">Migration risks impacting policy issuance and cash flow<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400;font-family: arial, helvetica, sans-serif\">Dependency on new vendors and reduced internal control in more complex architectures<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400;font-family: arial, helvetica, sans-serif\">Challenges in auditability and regulatory reporting when moving to real-time processing<\/span><\/li>\n<\/ul>\n<p><em><span style=\"font-family: arial, helvetica, sans-serif\"><b>\u201cReal-time is not inherently risky &#8211; the real risk lies in a \u2018big bang\u2019 approach that replaces everything at once.\u201d<\/b><\/span><\/em><\/p>\n<h2><span style=\"font-family: arial, helvetica, sans-serif\"><b>Core principle: Hybrid batch + Real-time architecture<\/b><\/span><\/h2>\n<p><span style=\"font-weight: 400;font-family: arial, helvetica, sans-serif\">Based on multiple core transformation programs, a foundational principle emerges: introduce real-time processing in the channel, interaction, and data layers first, while retaining the legacy core as the system of record.<\/span><\/p>\n<p><span style=\"font-weight: 400;font-family: arial, helvetica, sans-serif\">Functional separation is critical:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400;font-family: arial, helvetica, sans-serif\">Processes requiring instant response &#8211; such as quoting, fraud alerts, and customer notifications \u2192 should be event-driven<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400;font-family: arial, helvetica, sans-serif\">Processes requiring absolute accuracy &#8211; such as premium reconciliation, actuarial accounting, and regulatory reporting \u2192 should remain batch-based<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400;font-family: arial, helvetica, sans-serif\">End-of-day batch reconciliation ensures ledger integrity, even when front-end processes operate in real time\u00a0<\/span><\/li>\n<\/ul>\n<h2><span style=\"font-family: arial, helvetica, sans-serif\"><b>Three core transformation models for Vietnamese insurers<\/b><\/span><\/h2>\n<p><span style=\"font-weight: 400;font-family: arial, helvetica, sans-serif\">Drawing on practical implementation experience and research from BCG, McKinsey, and Kearney, three modernization models are particularly suited to Vietnam\u2019s context:<\/span><\/p>\n<p><a href=\"https:\/\/cdn.fpt-is.com\/en\/sites\/3\/2026\/04\/Table-2.-Three-core-modernization-pathways-aligned-with-a-risk-conscious-approach-1776226655.png\"><img decoding=\"async\" class=\"aligncenter size-full wp-image-24075\" src=\"https:\/\/cdn.fpt-is.com\/en\/sites\/3\/2026\/04\/Table-2.-Three-core-modernization-pathways-aligned-with-a-risk-conscious-approach-1776226655.png\" alt=\"Table 2. Three Core Modernization Pathways Aligned With A Risk Conscious Approach 1776226655\" width=\"1280\" height=\"409\" srcset=\"https:\/\/cdn.fpt-is.com\/en\/sites\/3\/2026\/04\/Table-2.-Three-core-modernization-pathways-aligned-with-a-risk-conscious-approach-1776226655.png 1280w, https:\/\/cdn.fpt-is.com\/en\/sites\/3\/2026\/04\/Table-2.-Three-core-modernization-pathways-aligned-with-a-risk-conscious-approach-1776226655-700x224.png 700w\" sizes=\"(max-width: 1280px) 100vw, 1280px\" \/><\/a><\/p>\n<p><span style=\"font-family: arial, helvetica, sans-serif\"><b>Model 1: \u201cHollow Out\u201d &#8211; Retain the core, externalize digital capabilities<\/b><b><br \/>\n<\/b><span style=\"font-weight: 400\"> Keep the existing core system as the system of record. Gradually externalize customer-facing functions via APIs, such as: quoting, agent portals, and self-service applications. Each phase includes a rollback plan and runs in parallel before decommissioning legacy flows. This model is ideal for organizations seeking tight control over migration risk.<\/span><\/span><\/p>\n<p><span style=\"font-family: arial, helvetica, sans-serif\"><b>Model 2: \u201cWrap &amp; Extend\u201d &#8211; Build a digital middle layer<\/b><b><br \/>\n<\/b><span style=\"font-weight: 400\">Introduce a digital middle layer around the core, including: an integration layer, BPM\/workflow, and customer interaction engine. This layer handles real-time orchestration, while the core continues batch processing where appropriate. This is the fastest path to enabling real-time customer experience with minimal disruption to the core.<\/span><\/span><\/p>\n<p><span style=\"font-family: arial, helvetica, sans-serif\"><b>Model 3: Domain-by-Domain replacement<\/b><\/span><\/p>\n<p><span style=\"font-weight: 400;font-family: arial, helvetica, sans-serif\">Replace modules incrementally. For example, starting with claims, where customer experience improvements deliver the fastest impact, while retaining core policy administration and billing. Alternatively, sequencing can vary based on strategy. This approach reduces risk compared to a big bang and enables controlled learning.<\/span><\/p>\n<p><span style=\"font-family: arial, helvetica, sans-serif\"><b>The common principle across all three models:<\/b><span style=\"font-weight: 400\"> no credible strategy recommends replacing the entire insurance core system in a single step.<\/span><\/span><\/p>\n<h2><span style=\"font-family: arial, helvetica, sans-serif\"><b>Impact on core insurance functions<\/b><\/span><\/h2>\n<p><span style=\"font-family: arial, helvetica, sans-serif\"><b>Underwriting and pricing:<\/b><b><br \/>\n<\/b><span style=\"font-weight: 400\">Real-time risk scoring engines leverage behavioral data, claims history, and IoT signals. This is not \u201cAI magic\u201d &#8211; it is a rule-based system designed by underwriting teams, executed automatically in milliseconds instead of hours.<\/span><\/span><\/p>\n<p><span style=\"font-family: arial, helvetica, sans-serif\"><b>Claims:<\/b><\/span><\/p>\n<p><span style=\"font-weight: 400;font-family: arial, helvetica, sans-serif\">Digital FNOL (First Notice of Loss), automated triage, and real-time fraud detection significantly improve efficiency. In Vietnam, real-world implementations have reduced simple claims processing time to ~20 minutes, with over 80% of cases resolved at first contact.<\/span><\/p>\n<p><span style=\"font-family: arial, helvetica, sans-serif\"><b>Billing and Renewals:<\/b><b><br \/>\n<\/b><span style=\"font-weight: 400\">Context-aware notifications are delivered at the right time, through the right channel, based on actual customer behavior. Renewal rates improve when engagement happens during active app usage, rather than via batch-generated communications at the start of the month.<\/span><\/span><\/p>\n<p><span style=\"font-family: arial, helvetica, sans-serif\"><b>Critical Success Factors in Core Modernization<\/b><\/span><\/p>\n<p><span style=\"font-weight: 400;font-family: arial, helvetica, sans-serif\">Most core transformation failures are not caused by technology, but by the gap between business and IT. Key success factors include:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400;font-family: arial, helvetica, sans-serif\">Underwriting, claims, and product teams must co-design rules and event flows with IT, not simply define requirements and hand them over<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400;font-family: arial, helvetica, sans-serif\">Shift from a \u201csystem implementation project\u201d mindset to a \u201cproduct and platform\u201d approach, with continuous optimization post go-live<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400;font-family: arial, helvetica, sans-serif\">Invest in internal capabilities for data and integration, including teams specializing in APIs, streaming, and data platforms<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400;font-family: arial, helvetica, sans-serif\">Define a clear risk appetite for downtime and data inconsistencies before deciding which processes can operate in real time<\/span><\/li>\n<\/ul>\n<p><span style=\"font-family: arial, helvetica, sans-serif\"><b>Conclusion: Transforming the insurance core the right way &#8211; Safe and future-ready<\/b><\/span><\/p>\n<p><span style=\"font-weight: 400;font-family: arial, helvetica, sans-serif\">Established insurers possess strengths that many insurtech startups lack: deep domain expertise, experience managing systems across multiple cycles, and strong financial discipline. The goal is not to abandon these advantages, but to embed them into the design of modern digital architectures.<\/span><\/p>\n<p><span style=\"font-weight: 400;font-family: arial, helvetica, sans-serif\">Insurance core transformation is not a race for speed, it is a race to manage risk while moving forward.<\/span><\/p>\n<p><span style=\"font-family: arial, helvetica, sans-serif\"><b><i>The real question is not \u201cwhether to transform,\u201d but \u201cwhich model enables progress without compromising stability.\u201d<\/i><\/b><\/span><\/p>\n<h2><span style=\"font-family: arial, helvetica, sans-serif\"><b>References<\/b><\/span><\/h2>\n<p><span style=\"font-family: arial, helvetica, sans-serif\"><b>[1]\u00a0 <\/b><span style=\"font-weight: 400\">Vietnam Report \u2013 Top 10 C\u00f4ng ty B\u1ea3o hi\u1ec3m uy t\u00edn 2025, ph\u00e2n t\u00edch xu h\u01b0\u1edbng c\u00f4ng ngh\u1ec7 ng\u00e0nh<\/span><\/span><\/p>\n<p><span style=\"font-family: arial, helvetica, sans-serif\"><b>[2]\u00a0 <\/b><span style=\"font-weight: 400\">Hiep h\u1ed9i B\u1ea3o hi\u1ec3m Vi\u1ec7t Nam (B\u00f9i Gia Anh) \u2013 N\u0103m t\u00e1i thi\u1ebft ni\u1ec1m tin v\u00e0 chuy\u1ec3n \u0111\u1ed5i m\u1ea1nh m\u1ebd, 12\/2025<\/span><\/span><\/p>\n<p><span style=\"font-family: arial, helvetica, sans-serif\"><b>[3]\u00a0 <\/b><span style=\"font-weight: 400\">VNEconomy \u2013 H\u1ed9i ngh\u1ecb C\u1ea5p cao B\u1ea3o hi\u1ec3m Vi\u1ec7t Nam 2025: Chi\u1ebfn l\u01b0\u1ee3c ph\u00e1t tri\u1ec3n k\u1ef7 nguy\u00ean AI<\/span><\/span><\/p>\n<p><span style=\"font-family: arial, helvetica, sans-serif\"><b>[4]\u00a0 <\/b><span style=\"font-weight: 400\">PJICO \u2013 B\u1ed9 ba c\u00f4ng ngh\u1ec7 quy\u1ebft \u0111\u1ecbnh t\u0103ng tr\u01b0\u1edfng doanh nghi\u1ec7p b\u1ea3o hi\u1ec3m, 12\/2025<\/span><\/span><\/p>\n<p><span style=\"font-family: arial, helvetica, sans-serif\"><b>[5]\u00a0 <\/b><span style=\"font-weight: 400\">Hicron Software \u2013 Strategies for Core IT Modernization in Insurance<\/span><\/span><\/p>\n<p><span style=\"font-family: arial, helvetica, sans-serif\"><b>[6]\u00a0 <\/b><span style=\"font-weight: 400\">McKinsey \u2013 How P&amp;C Insurers Can Successfully Modernize Core Systems<\/span><\/span><\/p>\n<p><span style=\"font-family: arial, helvetica, sans-serif\"><b>[7]\u00a0 <\/b><span style=\"font-weight: 400\">BCG \u2013 Three Paths to Modernizing Core IT for Insurers (2024)<\/span><\/span><\/p>\n<p><span style=\"font-family: arial, helvetica, sans-serif\"><b>[8]\u00a0 <\/b><span style=\"font-weight: 400\">FPT Software \u2013 From Traditional to Tech-Abled: Insurance in Vietnam<\/span><\/span><\/p>\n<p><span style=\"font-family: arial, helvetica, sans-serif\"><b>[9]\u00a0 <\/b><span style=\"font-weight: 400\">IAIS \u2013 Insurance and Financial Stability (2022)<\/span><\/span><\/p>\n<p><span style=\"font-family: arial, helvetica, sans-serif\"><b>[10]\u00a0 <\/b><span style=\"font-weight: 400\">PS Global Consulting \u2013 Event-Driven vs Batch Processing: Why Not Both<\/span><\/span><\/p>\n<p><span style=\"font-family: arial, helvetica, sans-serif\"><b>[11]\u00a0 <\/b><span style=\"font-weight: 400\">Kearney \u2013 Futureproof Core Strategy for Insurers<\/span><\/span><\/p>\n<p><span style=\"font-family: arial, helvetica, sans-serif\"><b>[12]\u00a0 <\/b><span style=\"font-weight: 400\">AWS \u2013 InsurTech Event-Driven Insurance Policy Processing<\/span><\/span><\/p>\n<p><span style=\"font-family: arial, helvetica, sans-serif\"><b>[13]\u00a0 <\/b><span style=\"font-weight: 400\">EasySend \u2013 Core Systems &amp; Customer Interaction Engines<\/span><\/span><\/p>\n<p><span style=\"font-family: arial, helvetica, sans-serif\"><b>[14]\u00a0 <\/b><span style=\"font-weight: 400\">Moldstud \u2013 Implementing Real-Time Data Processing in Insurance Operations<\/span><\/span><\/p>\n<p><span style=\"font-family: arial, helvetica, sans-serif\"><b>[15]\u00a0 <\/b><span style=\"font-weight: 400\">Centric Consulting \u2013 Data in Insurance: How Real is Real-Time?<\/span><\/span><\/p>\n<p>&nbsp;<\/p>\n<table style=\"border-collapse: collapse;width: 100%\">\n<tbody>\n<tr>\n<td style=\"width: 100%\"><span style=\"font-family: arial, helvetica, sans-serif\"><em><b>Mr. Hung Nguyen &#8211; Head of Product Development, Healthcare Division, FPT IS, FPT Corp<\/b><\/em><b><br \/>\n<\/b><span style=\"font-weight: 400\">A technology expert with over 10 years of experience in software development and digital transformation, specializing in system architecture design, digital product development, and leading large-scale technology implementations. His approach aligns technology strategy with business objectives, helping organizations optimize operations and build sustainable competitive advantage.<\/span><\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n","protected":false},"author":21,"featured_media":24076,"parent":0,"template":"","nang_luc":[833],"danh_muc_goc_nhin_so":[],"dich_vu":[],"linh_vuc":[512],"platform":[],"san_pham":[],"the_goc_nhin_so":[],"class_list":["post-24073","goc_nhin_so","type-goc_nhin_so","status-publish","has-post-thumbnail","hentry","nang_luc-bfsi","linh_vuc-bfsi"],"acf":[],"_links":{"self":[{"href":"https:\/\/fpt-is.com\/en\/wp-json\/wp\/v2\/goc_nhin_so\/24073","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/fpt-is.com\/en\/wp-json\/wp\/v2\/goc_nhin_so"}],"about":[{"href":"https:\/\/fpt-is.com\/en\/wp-json\/wp\/v2\/types\/goc_nhin_so"}],"author":[{"embeddable":true,"href":"https:\/\/fpt-is.com\/en\/wp-json\/wp\/v2\/users\/21"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/fpt-is.com\/en\/wp-json\/wp\/v2\/media\/24076"}],"wp:attachment":[{"href":"https:\/\/fpt-is.com\/en\/wp-json\/wp\/v2\/media?parent=24073"}],"wp:term":[{"taxonomy":"nang_luc","embeddable":true,"href":"https:\/\/fpt-is.com\/en\/wp-json\/wp\/v2\/nang_luc?post=24073"},{"taxonomy":"danh_muc_goc_nhin_so","embeddable":true,"href":"https:\/\/fpt-is.com\/en\/wp-json\/wp\/v2\/danh_muc_goc_nhin_so?post=24073"},{"taxonomy":"dich_vu","embeddable":true,"href":"https:\/\/fpt-is.com\/en\/wp-json\/wp\/v2\/dich_vu?post=24073"},{"taxonomy":"linh_vuc","embeddable":true,"href":"https:\/\/fpt-is.com\/en\/wp-json\/wp\/v2\/linh_vuc?post=24073"},{"taxonomy":"platform","embeddable":true,"href":"https:\/\/fpt-is.com\/en\/wp-json\/wp\/v2\/platform?post=24073"},{"taxonomy":"san_pham","embeddable":true,"href":"https:\/\/fpt-is.com\/en\/wp-json\/wp\/v2\/san_pham?post=24073"},{"taxonomy":"the_goc_nhin_so","embeddable":true,"href":"https:\/\/fpt-is.com\/en\/wp-json\/wp\/v2\/the_goc_nhin_so?post=24073"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}