Behind Intact’s legacy system modernization

When it comes to legacy system modernization, Canada’s largest insurer prefers a rebuild approach rather than a complete replacement, a company executive tells Tuesday’s KPMG’s 2025 Insurance Conference in Toronto.

“I’m convinced the ‘rip and replace’ doesn’t work unless you have a real strong need for it, and it’s going to be based on risk, reward and the realities that you’re facing in your organization,” says Ralph Virdo, vice president of architecture & transformation at Intact. “So, I’m convinced the incremental rebuild approach is the way to go.”

Panellists from Intact, KPMG in Canada and the Workplace Safety and Insurance Board (WSIB) were discussing various approaches to legacy modernization: rip and replace, reimagine and rebuild.

Virdo outlined Intact’s legacy modernization journey, dating back more than 20 years when the insurer was still ING Canada. The insurer had three “rip and replace moments in our history where we started to build new platforms off to the side,” Virdo tells conference attendees. But the platforms — which included two in-house and one outsourced project — never saw the light of day.

“Looking back, what you find is that the business doesn’t stop,” he says. “And so, you can’t pause for three years while you’re building something new.

“At the same time, you can’t be off on the side building something while the business continues,” Virdo adds. “Because when you emerge, the business has changed, the economy has changed, the markets change. The technology has changed, so you’ll be constantly chasing some moving targets.”

Responding to an audience question about how the technology failures were received. Virdo says there was trust in what they were trying to build, “only to find, again, that we’re trying to hit a moving target…After a couple of years with no value being delivery to the business and many, many millions in spend, that’s when the plug was pulled.”

Over the past dozen years, Intact started looking at its tech mainframe — monolith, packaged software that would run all insurance transactions. The carrier went “capability by capability,” choosing which piece to upgrade first, driven by business imperatives.

“What it did was it really stretch out our ability to remove all those core capabilities out of the mainframe, applying a switch off, but you’re getting that incremental value as you go and you’re standing up these new products…,” Virdo says. “Our current timeline is up to 2031…so you can see the length of our journey.”

Building the next legacy system

At the same time, it’s important to recognize the speed of technology.

“What you have to realize is that everything you’re building new is the next legacy,” Virdo says. “What we didn’t do well, again looking back, is as we were building these new systems or acquiring configuring systems and integrating them, we weren’t necessarily making continuous improvement and continuous modernization part of that product’s development lifecycle.

“If you don’t do that, you’re just creating the next modernization crisis…We have to start treating everything that we build as a product with a product lifecycle…”

Otherwise, a large portion of the investment could go into keeping the technology current and paying down ‘tech debt,’ Virdo says. “I know it’s hard to hear that, but it’s the reality you’re hedging against — being in this situation again five years from now.”

Virdo recommends setting up a central data governance office, so there’s one enterprise data platform for all data. There should also be a data cataloging tool, along with clear roles and responsibilities.

“[Be] very clear about who owns the data, who is accountable for ensuring that we have enough metadata about that data, [and] who are the custodians of the data,” he says. “Look at just streaming everything to a central data platform and make sure that it’s well catalogued so you can understand what data is in there…”