IT modernization helps insurer future-proof applications
Netherlands financial service provider NN Group is building a flexible, adaptable tech stack to modernize its mainframe applications—helping prepare the business for the future.
For NN Group, one of the biggest insurance and financial services providers in the Netherlands, its history of more than 175 years is one of its strongest assets. During this time, the company has seen plenty of trends come and go, and it has also seen its share of technology best practices change during this time. NN Group has learned from its vast experience to prepare for whatever comes next: Its technology team is currently building a flexible, adaptable tech stack that modernizes approaches and helps prepare the business for the future.
The process to modernize its mainframe applications in the life and pensions group started around 20 years ago and has been ongoing. In 2021, the company began re-platforming the last of its 13 mainframe applications, migrating the application architecture to Java. But simply pushing the existing code to a virtual environment wasn’t an option.
“When you dive deeper into the application code, you find all kinds of tricks that were clever 50 years ago but are inefficient today,” says Richard Sanders, director of change and IT in the life and pensions department at NN Group.1
For example, the technology team found multiple instances of assembler code nested inside database files, which created a highly technical challenge. The team used an automatic refactoring tool that translated these mainframe applications from Cobol to Java, but because of these decades-old customizations, developers still had to put in a significant amount of effort to ensure that the translation was effective. About 40% of the work was dedicated to the direct refactoring, but another 40% was consumed by testing to ensure applications continued working as expected after the translation. The remaining 20% of the work went to user training.
Luckily, all that work is paying off for NN Group’s life and pensions business unit in multiple ways. It decommissioned its entire mainframe platform by automatically transforming over 10 million lines of code from Cobol to Java. This helped NN Group’s life and pensions group reduce IT platform costs by 80%. Such significant savings mean the project will pay for itself in under three years. But the benefits don’t end there.
For one thing, applications run much more efficiently. In the past, mainframe applications would require several pages of assembler code just to execute one statement that can now be done with a single Java command. This creates the opportunity to make applications much more streamlined. “Having code that we can make better and smaller is a step toward future-proofing the system,” Sanders says.
Another major benefit is that NN Group is now able to attract more talent, as younger people generally are unfamiliar with legacy code like Cobol.
Perhaps most importantly, Sanders expects the move will reduce costs. When applications were on the mainframe, the company was highly reliant on its vendor to continue supporting the tool. But the vendor had signaled it was going to raise its prices, which threatened to put NN Group in the position of paying more for older tooling. But now that NN Group is off the mainframe, it relies less on a single vendor, and its more modern codebase can be taken to multiple platforms in the future.
“In the old situation, we were dependent on vendors,” Sanders says. “But now we’re not locked into that situation. We can go in any direction we want.”