Insurance Solutions

Technical debt: when it’s intentional

Insurance Solutions | Georgina | 22 October 2021

Growth is what insurers strive for. Whether it comes organically, through acquisition or strategic market penetration – it is at the forefront of all insurers’ strategies. However, growth creates complexity, complexity creates barriers and barriers hinder growth.

When an insurer grows over time it will introduce new systems, sunset older ones and continue support for others. A patchwork architecture evolves and, as most are business-critical systems, they continually crave attention and upkeep. Many of those systems need to interact, and many need a significant amount of technical (and non-technical) resources available to maintain them.

Intentional technical debt

Like well-structured financial debt, when delivering a solution an insurer can make wise technical debt decisions to realise short-term, yet necessary gains. It is only when these decisions are deliberate, structured and planned for can they be deemed truly intentional. Intentional technical debt involves accepting lower solution quality (usually code) as a part of shortcuts taken and decisions made by the programme delivery team.

This avenue of debt is one where the problem, shortcuts and consequences are recognised (and hopefully reported on!) prior to the action being taken. It is acknowledged that despite this ‘quality corner cutting’, the route will still deliver the required functionality to meet specific business value. Intentionally accepting debt could be strategic, for example, being ‘first to market’ could be the business imperative. The market advantage of beating your competitors can be worth the pain of needing to rewrite and ‘fix’ code in your system further down the road.

Unrealistic expectations and too ambitious deadlines can be common culprits for causing intentional technical debt.

How insurers can reduce this type of debt

Insurers will always have technology of different ages/versions and for different business purposes. It is when technical debt is driven by (deliberate) actions that business leaders need to scrutinise more closely.

Our recommendations for reduction:

  1. Ensure the alignment between IT strategy and your vision is correct and establish robust KPIs to validate this position.
  2. Conduct a thorough audit to quantify the ‘debt service’ costs. Focus on Strategy, Architecture, Talent and Process. The output of this audit should give:
    a. Percentage of budget spent supporting/maintaining the debt
    b. A timeline for repayment
    c. Business owners for each area
  3. Ensure there is a proportional relationship between funding and strategy. This must tie into your understanding of the Total Cost of Ownership (TCO)
  4. When delivering large-scale transformation, e.g. for either claims or policy, ensure you have dedicated resource for solution assurance. This can be neglected, or only addressed in an ‘after the fact’ fashion. Course correction is best done in real-time, not after the damage has been done. A solution assurance service will significantly unwanted technical debt.
  5. Create a backlog to capture known areas of technical debt.

intentional technical debt


Remember, technical debt can be measured and managed. With the right approach, insurers can regain control and refocus their technology resources on creating value for customers and the business. Addressing debt and refactoring after a project has concluded is an option – and a common one.

However, at this point debt is endured at a high premium. A better way is early proactive identification of potential problems, as well as ensuring their escalation and resolution. A programme’s vision should be about ‘getting it right first time’, after all, prevention is better than cure.