Introduction: The sustainability imperative for insurers and IT leaders
The insurance industry has recognized its profound responsibility towards environmental sustainability with major insurance groups committing to net zero targets. The underwriting and investment portfolios of insurers form a significant part of insurers’ climate and sustainability exposure and opportunity. Beyond that, insurers are scrutinizing and optimizing their own operational footprints to reduce greenhouse gas (GHG) emissions.
In today’s tech-driven environment, an insurer’s enterprise IT has become a key contributor to its Scope 2 and Scope 3 emissions. Insurance core systems, spanning from policy administration to claims to billing, as well as associated data and analytics infrastructure, comprise a key part of insurers’ enterprise IT. With business models becoming increasingly digital- and AI-first, the role of technology in insurers’ environmental footprints continues to rise.
To contribute to their organizations’ sustainability agenda, CIOs and other insurance IT leaders need to deliver digital sustainability dividends, which Gartner® defines as “the value that is created from digital investments in the form of sustainability outcomes, in addition to growth and business outcomes.” ¹
So, how can insurers realize sustainable IT by design and how can enterprise IT leaders deliver digital sustainability dividends? In this article, we look beyond digitized and paperless processes and explore how a step change reduction of over 95% in the GHG emission footprint of insurance core applications can be realized.
The challenge: Legacy IT is inherently unsustainable
The challenge: Legacy IT is inherently unsustainable
The average insurer’s core system infrastructure dates back decades and has organically and inorganically evolved into a landscape of fragmented applications for different value chain processes (e.g., claims vs. underwriting), business lines (e.g., retail vs. commercial P&C) and business models (e.g., separate systems for digital and offline business). The resulting duplications lead to higher energy use and GHG emissions.
Often, these solutions are deployed in proprietary data centers on legacy mainframes with old chipsets and low energy efficiency, requiring specialized hardware and support. Lacking the dynamic scalability of cloud-native applications, resources tend to be overprovisioned for such legacy systems. Despite this, many insurers are unable to realize the concurrency and latency needed for high-volume, digital-first business models (e.g., embedded insurance) and real-time operations.
Importantly, hardly any insurance group realizes technology synergies across borders—and almost never on the level of data centers and hosting. This drives further inefficiencies and higher emissions than if resources could be pooled across borders.
The average insurer’s core system infrastructure dates back decades and has organically and inorganically evolved into a landscape of fragmented applications for different value chain processes (e.g., claims vs. underwriting), business lines (e.g., retail vs. commercial P&C) and business models (e.g., separate systems for digital and offline business). The resulting duplications lead to higher energy use and GHG emissions.
Often, these solutions are deployed in proprietary data centers on legacy mainframes with old chipsets and low energy efficiency, requiring specialized hardware and support. Lacking the dynamic scalability of cloud-native applications, resources tend to be overprovisioned for such legacy systems. Despite this, many insurers are unable to realize the concurrency and latency needed for high-volume, digital-first business models (e.g., embedded insurance) and real-time operations.
Importantly, hardly any insurance group realizes technology synergies across borders—and almost never on the level of data centers and hosting. This drives further inefficiencies and higher emissions than if resources could be pooled across borders.
The opportunity: Realizing sustainable insurance IT modernization
The opportunity: Realizing sustainable insurance IT modernization
To realize sustainable insurance IT by design, we identify three key levers allowing innovation-forward IT leaders to reduce the GHG footprint of their core systems by over 95% compared to current levels,² while unlocking significant business benefits (see Illustration 1).
Importantly, this is without considering a switch to more sustainable energy sources and the associated GHG emission reductions (as the opportunity for this varies by location).
Illustration 1: Three key levers to boost sustainability in insurance IT
Illustration 1: Three key levers to boost sustainability in insurance IT
Unify fragmented systems and reduce overlaps
Fragmented systems are a key driver of integration, licensing and maintenance costs, leading to ballooning IT budgets. At the same time, they lead to fragmented processes and data, driving operations costs and time-to-market, while adversely impacting decision making and customer experience. Importantly, they also lead to duplication in underlying compute and data storage costs.
Based on our experience, the average composite insurer maintains half a dozen to a dozen core applications per country. On average, we expect compute cost reduction potentials of 30-50% (with corresponding reductions in power consumption and GHG emissions) by streamlining and unifying the core system landscape into one integrated core platform. This is driven by overlaps and redundancy on the application-level, but more importantly on the middleware-, framework- and infrastructure-level.
For example, such core system landscapes often feature fragmented caching and messaging services (e.g., Redis coexists with Memcached or Oracle Coherence, while Kafka, RabbitMQ and ActiveMQ operate in parallel in different core systems). Similar duplication occurs in configuration management, file storage, and task scheduling.
The problem grows more acute at the infrastructure-level, where isolated core applications typically not only maintain separate logging, monitoring, and alerting stacks, but also disparate DevOps pipelines and databases (e.g., MySQL, PostgreSQL, and Oracle). This creates significant operational duplication and resource waste. Data duplication across systems further drives energy consumption. As big data analytics and artificial intelligence continue to grow in importance, the problem continues to compound.
Fragmented systems are a key driver of integration, licensing and maintenance costs, leading to ballooning IT budgets. At the same time, they lead to fragmented processes and data, driving operations costs and time-to-market, while adversely impacting decision making and customer experience. Importantly, they also lead to duplication in underlying compute and data storage costs.
Based on our experience, the average composite insurer maintains half a dozen to a dozen core applications per country. On average, we expect compute cost reduction potentials of 30-50% (with corresponding reductions in power consumption and GHG emissions) by streamlining and unifying the core system landscape into one integrated core platform. This is driven by overlaps and redundancy on the application-level, but more importantly on the middleware-, framework- and infrastructure-level.
For example, such core system landscapes often feature fragmented caching and messaging services (e.g., Redis coexists with Memcached or Oracle Coherence, while Kafka, RabbitMQ and ActiveMQ operate in parallel in different core systems). Similar duplication occurs in configuration management, file storage, and task scheduling.
The problem grows more acute at the infrastructure-level, where isolated core applications typically not only maintain separate logging, monitoring, and alerting stacks, but also disparate DevOps pipelines and databases (e.g., MySQL, PostgreSQL, and Oracle). This creates significant operational duplication and resource waste. Data duplication across systems further drives energy consumption. As big data analytics and artificial intelligence continue to grow in importance, the problem continues to compound.
Shift to public cloud and cloud-native solutions
Transitioning workloads from proprietary data centers to public clouds can dramatically reduce energy consumption per workload and associated GHG emissions (while shifting emissions from Scope 2 to Scope 3). Public clouds typically feature more efficient hardware and silicon (e.g., optimized server layouts, chips specialized for certain workloads), higher utilization through virtualization, containerization and pooling of resources, and overall economies of scale.
Cloud-vendor commissioned studies promise GHG emission savings of up to 99% when shifting workloads to public cloud.³ However, these claims tend to muddle energy savings from measures outlined above with benefits from more sustainable energy sources and the purchasing of carbon certificates. Generally, insurers also have the option to purchase greener energy or carbon certificates for their own data centers. For this reason, we exclude the sustainability of the underlying energy source in our assessment.
All else equal, stripping out this impact and looking at energy efficiency gains for compute and storage, GHG emission reductions in a lift-and-shift scenario to public cloud are expected to end up in the range of 30-50% (or even more, subject to the efficiency of the on-premises set-up).
Simply lifting and shifting legacy systems to the cloud can offer clear sustainability benefits, but the potential is only partially realized as not all cloud-native features are unlocked. Such legacy systems typically lack the technical prowess offered by modern cloud-native platforms, such as optimized resource allocation, autoscaling, burstable or spot instances, and serverless computing options. Furthermore, such modern applications are often coded and architected to further reduce energy (e.g., more efficient algorithms).
A modern cloud-native core insurance platform can realistically improve resource utilization and reduce the GHG footprint by 50-70% or more compared to a legacy on-premises system.
Cloud-vendor commissioned studies promise GHG emission savings of up to 99% when shifting workloads to public cloud.³ However, these claims tend to muddle energy savings from measures outlined above with benefits from more sustainable energy sources and the purchasing of carbon certificates. Generally, insurers also have the option to purchase greener energy or carbon certificates for their own data centers. For this reason, we exclude the sustainability of the underlying energy source in our assessment.
All else equal, stripping out this impact and looking at energy efficiency gains for compute and storage, GHG emission reductions in a lift-and-shift scenario to public cloud are expected to end up in the range of 30-50% (or even more, subject to the efficiency of the on-premises set-up).
Simply lifting and shifting legacy systems to the cloud can offer clear sustainability benefits, but the potential is only partially realized as not all cloud-native features are unlocked. Such legacy systems typically lack the technical prowess offered by modern cloud-native platforms, such as optimized resource allocation, autoscaling, burstable or spot instances, and serverless computing options. Furthermore, such modern applications are often coded and architected to further reduce energy (e.g., more efficient algorithms).
A modern cloud-native core insurance platform can realistically improve resource utilization and reduce the GHG footprint by 50-70% or more compared to a legacy on-premises system.
Harmonize regionally through multi-tenancy
The best investments are those that can be shared and re-used across entities and borders. However, historically, most insurers—even those belonging to large multinational groups with significant centralized functions—have struggled to realize meaningful synergies across borders, with disparate tech stacks being one of the key drivers.
To enable a synergistic multi-country set-up, products and processes should be harmonized. This harmonization becomes significantly easier if the tech stack is also regionally aligned. A core platform supporting multi-tenancy (i.e., one regional instance with separate country tenants) drives significant value in this case. Not only does it ensure that all country tenants run on the same system and version, facilitating the transferability of propositions, workflows, and integrations from one country to another. It also drives more efficient hosting and maintenance.
Peak3’s real-life examples show an incremental per tenant GHG saving potential of over 40% for a two-tenant deployment and over 70% for a six-tenant deployment—each compared to a single-country, single-tenant deployment (see Exhibit: UNIQA’s multi-tenant, multi-country core modernization).
Exhibit: UNIQA’s multi-tenant, multi-country core modernization
UNIQA is one of the leading insurance groups in Central and Eastern Europe (CEE) and committed to net-zero and Paris climate targets. In its six-country Southeast Europe (SEE) sub-region, UNIQA is gradually modernizing its complex legacy core system landscape, consisting of dozens of separate systems, into Graphene, Peak3’s cloud-native insurance core platform. Four countries are already live on Graphene at the time of this publication.
In this market-first multi-country, single-instance, multi-tenant core modernization program, Graphene is hosted in one central instance on public cloud with each country as separate tenant. While data and configurations are securely segregated, products and processes have been holistically harmonized to reduce complexity and drive efficiency.
A significant part of the cloud resources are tied to maintaining the base instance (e.g., for VPC, networking, container cluster, DevOps, middleware, logging, monitoring, security), while a smaller part is driven by additional compute and storage for each incremental tenant. Instead of doubling GHG emissions when adding a second country in a multi-instance, single-tenant set-up, the incremental GHG emissions to add a second country are only 16% of the first country (corresponding to 42% emission savings on a per tenant basis, as shown in Illustration 2).
This allows UNIQA to reduce its emission footprints across the six countries in the SEE region by 70% compared to the alternative of a multi-instance, single-tenant deployment. Importantly, this is before the significant additional benefits outlined from system unification and transition from on-premises to cloud.
Illustration 2: GHG efficiency gains in multi-tenant deployments
Recommendation: What insurance
IT leaders should do next
Recommendation: What insurance
IT leaders should do next
In summary, while each individual lever can drive significant emission reduction, ambitious insurance leaders will be able to reduce their GHG emission footprint by over 95% by systematically moving their legacy architecture to unified, cloud-native core platforms and by approaching modernization regionally instead of locally.
We recommend the following actions to insurance IT leaders:
Peak3: Your partner for future-proof, sustainable insurance IT
Peak3: Your partner for future-proof, sustainable insurance IT
Graphene is Peak3's intelligent cloud insurance core platform. Its end-to-end but modular capabilities span the entire insurance value chain—across Property & Casualty, Life, and Health product lines.
Purpose-built from the outset on microservices and cloud-native architecture, Graphene enables flexible and sustainable modernization strategies. It is available on all major public cloud providers and supports multi-tenant and multi-country deployments. This allows insurers to build efficient and scalable business models across borders.
Peak3 is committed to making insurance IT more sustainable. As such, Peak3 continuously invests in optimizing the environmental and cost footprint of Graphene through holistic FinOps initiatives. Such recent initiatives include, inter alia, architecture optimizations like the switch from x86 to ARM architecture and the adoption of serverless architecture, realizing GHG emission reductions of 25% in the latest release of Graphene v3, all else equal.
Ready to drastically cut the environmental footprint of your IT operations, while unlocking new growth and innovation, and boosting user experience and efficiency? Reach out to us to discuss your tailored path to sustainable insurance IT modernization.
________________________________________________________________________
_______________________________________________________
References
¹ Gartner, Innovation Insights: Apply Digital Transformation to Achieve Sustainability Outcomes by Bettina Tratz-Ryan, Lloyd Jones, Hanna Karki, Ivar Berntz, Sarah Watt, Lauren Wheatley, Alexander Hoeppe, 23 July2025 (for Gartner subscribers only). GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.
² Subject to current status of core applications, efficiency of data centers, etc.
³ See for example publications by IDC, 451 Research and Microsoft.
³ See for example publications by IDC, 451 Research and Microsoft.
_______________________________________________________
References
¹ Gartner, Innovation Insights: Apply Digital Transformation to Achieve Sustainability Outcomes by Bettina Tratz-Ryan, Lloyd Jones, Hanna Karki, Ivar Berntz, Sarah Watt, Lauren Wheatley, Alexander Hoeppe, 23 July2025 (for Gartner subscribers only). GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.
² Subject to current status of core applications, efficiency of data centers, etc.
³ See for example publications by IDC, 451 Research and Microsoft.
________________________________________________________________________
About Peak3
Founded by insurance, digital and technology experts, Peak3 powers the digital operating system of the global insurance industry. We combine insurance core, distribution, and AI solutions to deliver a step change in performance for insurers, MGAs, and insurance intermediaries.
From greenfield embedded insurance ventures to digital-first, multi-country core modernization programs, our cloud-native SaaS solutions power top customers across life, health, and P&C insurance.
Peak3: Your partner for future-proof, sustainable insurance IT
Graphene is Peak3's intelligent cloud insurance core platform. Its end-to-end but modular capabilities span the entire insurance value chain—across Property & Casualty, Life, and Health product lines.
Purpose-built from the outset on microservices and cloud-native architecture, Graphene enables flexible and sustainable modernization strategies. It is available on all major public cloud providers and supports multi-tenant and multi-country deployments. This allows insurers to build efficient and scalable business models across borders.
Peak3 is committed to making insurance IT more sustainable. As such, Peak3 continuously invests in optimizing the environmental and cost footprint of Graphene through holistic FinOps initiatives. Such recent initiatives include, inter alia, architecture optimizations like the switch from x86 to ARM architecture and the adoption of serverless architecture, realizing GHG emission reductions of 25% in the latest release of Graphene v3, all else equal.
Ready to drastically cut the environmental footprint of your IT operations, while unlocking new growth and innovation, and boosting user experience and efficiency? Reach out to us to discuss your tailored path to sustainable insurance IT modernization.
________________________________________________________________________
________________________________________________________________________
References
¹ Gartner, Innovation Insights: Apply Digital Transformation to Achieve Sustainability Outcomes by Bettina Tratz-Ryan, Lloyd Jones, Hanna Karki, Ivar Berntz, Sarah Watt, Lauren Wheatley, Alexander Hoeppe, 23 July2025 (for Gartner subscribers only). GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.
¹ Gartner, Innovation Insights: Apply Digital Transformation to Achieve Sustainability Outcomes by Bettina Tratz-Ryan, Lloyd Jones, Hanna Karki, Ivar Berntz, Sarah Watt, Lauren Wheatley, Alexander Hoeppe, 23 July2025 (for Gartner subscribers only). GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.
² Subject to current status of core applications, efficiency of data centers, etc.
³ See for example publications by IDC, 451 Research and Microsoft.
² Subject to current status of core applications, efficiency of data centers, etc.
³ See for example publications by IDC, 451 Research and Microsoft.
About Peak3
Founded by insurance, digital and technology experts, Peak3 powers the digital operating system of the global insurance industry. We combine insurance core, distribution, and AI solutions to deliver a step change in performance for insurers, MGAs, and insurance intermediaries.
From greenfield embedded insurance ventures to digital-first, multi-country core modernization programs, our cloud-native SaaS solutions power top customers across life, health, and P&C insurance.
Founded by insurance, digital and technology experts, Peak3 powers the digital operating system of the global insurance industry. We combine insurance core, distribution, and AI solutions to deliver a step change in performance for insurers, MGAs, and insurance intermediaries.
From greenfield embedded insurance ventures to digital-first, multi-country core modernization programs, our cloud-native SaaS solutions power top customers across life, health, and P&C insurance.
________________________________________________________________________
________________________________________________________________________
References
¹ Gartner, Innovation Insights: Apply Digital Transformation to Achieve Sustainability Outcomes by Bettina Tratz-Ryan, Lloyd Jones, Hanna Karki, Ivar Berntz, Sarah Watt, Lauren Wheatley, Alexander Hoeppe, 23 July2025 (for Gartner subscribers only). GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.
² Subject to current status of core applications, efficiency of data centers, etc.
³ See for example publications by IDC, 451 Research and Microsoft.
³ See for example publications by IDC, 451 Research and Microsoft.
_________________________
_________________________
