Custom Software Development Experts Blog | Austin TX

How AI Decodes Decades-Old Business Logic for Insurance Core Systems

Written by Cody Goodwin | Jan. 26, 2026

Insurance carriers face a reality where precision drives profitability, and downtime costs millions. Every policy decision, claim outcome, and renewal calculation depends on your systems working exactly as intended.

Yet many are running critical operations on core systems that few in the company fully understand. Platforms built decades ago still handle policy administration, claims processing, underwriting, renewals, and payments. Over the years, these systems were extended to support new products, meet regulatory changes, and handle unique scenarios.

Each update made sense in isolation. But layer by layer, they’ve now created a web of complexity that’s preventing progress.

Why Core Modernization Can’t Wait

Pressure is mounting for you to move faster, improve digital experiences, and support new integrations. So while these legacy platforms may still run the business, that complexity now blocks the growth you need.

You’re not alone. Carriers often hesitate to modernize when teams can’t clearly explain how their system currently behaves. No one wants to risk breaking the business rules that are generating your revenue.

Without visibility into how the legacy system operates, making any changes becomes like walking a tightrope of uncertainty.

When Business Logic Lives Buried in Legacy Code

It’s not the age of your technology that’s the biggest concern. The greater challenge with most legacy insurance systems is the uncertainty that lives inside it.

Decades of your business logic sits buried in millions of lines of code:

  • Rating formulas with hundreds of variables
  • Claims handling rules with specific exceptions for different coverage types
  • Underwriting decision trees built through years of refinement
  • Renewal workflows that account for dozens of policy variations
  • Payment calculations that handle complex premium adjustments

This logic represents institutional knowledge worth millions.

But when it exists only in legacy code and the minds of a few long-tenured employees, you face serious problems.

The Hidden Cost of System Uncertainty

When those employees leave, that knowledge of the way the system works leaves with them. Uncertainty spreads as team members can’t confidently explain how the system behaves or why certain decisions get made.

Manual effort grows as exceptions accumulate. Teams spend valuable time trying to figure out the reason that certain workflows exist or what specific sections of code are responsible for key outcomes. Attempts to launch new products or integrate with modern portals become nearly impossible without complex workarounds.

Risk rises alongside hesitation. Even small updates turn into major projects because nobody wants to disrupt rules they don’t fully understand or break the flows generating business revenue.

Decisions take longer while your operational exposure keeps increasing as undocumented logic raises compliance concerns. Adding insult to injury, maintenance costs climb as the complexity compounds over time.

Why Your Modernization Efforts Lose Momentum

Without a clear view of system behavior, modernization becomes difficult to plan and even harder to approve.

Especially when traditional modernization efforts rely on interviews, workshops, and partial code reviews. These provide useful context, but rarely surface every rule, exception, and decision path built over decades, leading to:

  • Missed renewal exceptions
  • Hidden edge cases
  • Dependencies discovered late
  • Requirements shifting mid project

At this point, modernization projects often lose momentum and eventually stall out.

What Changes When the System Is Fully Understood

Making progress with your modernization begins with understanding your core system.

When carriers can clearly explain how their systems behave, decisions become easier. Your business and IT teams can align around the same facts, and your potential risks become visible and manageable.

How AI Makes Modernization Safer

When your decades-old systems contain the entire DNA of your business, with every rule, exception, and workflow locked inside, traditional modernization approaches are expensive and risky.

AI makes modernization safe by documenting your business logic with precision.

Our Legacy System Assessment uses proprietary AI tools to scan your legacy code and extract every business rule automatically. It maps workflows, identifies exceptions, and documents edge cases, clearly capturing:

Claims logic and exceptions

  • How different claim types get processed
  • What triggers manual review
  • Which exceptions require override approval

Rating formulas and coverage rules

  • Premium calculations with all variables
  • Coverage determination logic
  • Discount and surcharge rules

Underwriting steps and decision criteria

  • Approval paths
  • Risk assessment rules
  • Capacity triggers
  • Referral requirements

Renewal and endorsement workflows

  • Automatic renewal conditions
  • Manual intervention triggers
  • Endorsement processing rules

Billing and payment logic

  • Invoice generation rules
  • Payment allocation logic
  • Premium adjustment calculations

Compliance and reporting requirements

  • Regulatory reporting rules
  • Audit trail requirements
  • Data retention policies

What the Insurance Legacy System Blueprint Assessment Delivers

You gain the following critical assets:

1. A Full System Blueprint

  • Clear documentation of every business rule in everyday language
  • Technical diagrams showing data flows and dependencies
  • A workflow catalog identifying what still serves the business and what’s outdated
  • A test harness comparing legacy behavior to future implementations

2. Executive Legacy-to-Modern Roadmap

  • Details the different options to maintain, modernize, or migrate your core system
  • Lists the tradeoffs for each path
  • Provides cost estimates and ROI projections
  • Explains each team’s resource requirements

With these, your teams can finally understand how the system works and where the risks live. Business stakeholders can review requirements without needing to decode the technical specifications, while IT has validated documentation for building the replacement.

Combined, they provide a clear plan for what to do first and how best to proceed once you decide which route to take.

How Clear System Knowledge Benefits the Entire Organization

When modernization happens with your complete business logic documented, the results compound across the organization.

Policyholders Experience Better Service

Faster processing with reliable outcomes

  • Automated validation
  • Real-time updates
  • Processing times shrink
  • Reliability improves

Consistent, accurate information every time

  • Clean, accurate policy data flows across all systems
  • Decreased errors and delays

Self-service that actually works as expected

  • Digital processes handle routine requests such as online renewals, real-time claims tracking, and instant policy document access
  • Complex cases routed for support

Carriers Gain Operational Control

Freedom from legacy constraints

  • Modern systems that work the way your teams do.
  • Reduced manual effort
  • Automatic reconciliation and reporting

Ongoing reliability

  • Clean architecture removes single points of failure.
  • No downtime or performance issues during peak periods or changes.

Connected operations

  • Underwriting, customer service, and claims share real-time data.
  • Every department works from the same source of truth.

Built for growth

  • Future upgrades happen without major rebuilds.
  • Regulatory changes are implemented quickly.
  • New products launch without system constraints.
  • Scale without increasing complexity.

Intelligent processing

  • AI-driven validation and routing handle routine decisions automatically.
  • Underwriters and claims staff focus on complex cases requiring human judgment.

These outcomes aren’t theoretical. When system behavior is fully understood, these benefits show up quickly and consistently across the business.

Proof From Real Insurance Core Systems

By documenting their system logic first and using that clarity to modernize with confidence, carriers are already seeing gains.

One carrier Praxent partnered with depended on a decades-old system and undocumented code for their ratings, renewals, and claims.

Using the same AI extraction approach behind this assessment, every rule, exception, and dependency was uncovered. By analyzing and documenting their business logic, our experts helped them reduce their reporting efforts by 95% and modernize 30% faster.

They were able to maintain seamless service for their policyholders throughout the transformation, including zero downtime during their core system rebuild.

Another carrier was able to automate their policy renewals and applications, lowering their turnaround time by 90%. This decreased their staff’s manual workload, so they could shift their expertise to higher-value work.

Carriers that document their business logic first are able to move forward with clarity, making modernization measurable, predictable, and safe.

A Clear Path Forward

Carriers know they need to modernize. What stops them is the lack of a shared, reliable understanding about how their core systems actually operate.

Before you select vendors or plan major changes, you need clear documentation of your business logic and system dependencies. That foundation reduces risk and makes every decision that follows faster and easier.

Praxent’s AI-Powered Insurance Legacy System Assessment gives carriers that clarity.

It documents how your system works across claims, underwriting, rating, billing, renewals, and compliance, without disrupting operations or requiring system changes. The findings are delivered in clear business terms leadership can rely on.

With that understanding in place, you’re able to unlock the automation and efficiency your company needs to compete while preserving the business logic that made you successful in the first place.

Carriers that start with this level of clarity and modernize with AI improve customer experiences, optimize internal operations, and gain the agility to respond faster to market changes.

When your team is ready to understand what you're really working with and how to modernize safely, let’s talk.