Replacing a Core System in Record Time for German Health Insurance Leader

But because of tightening regulatory requirements, cost pressure, an increasingly complex health insurance landscape, and growing speed and scalability expectations, future industry leaders are recognizing that now is the time to act. the need to act now.

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On the topic of regulation, key developments include an Electronic Patient Record for everyone (opt-out), and new data exchange formats (HL7 FHIR). The transition to the RSA encryption system is another prime example – a foundational asymmetric algorithm that features paired public and private keys.

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Before diving into the details of this success story, let’s explore the scale of the opportunity for insurers that carry out effective transformations (and the bottlenecks faced by those maintaining legacy systems).

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Bottlenecks and Breakthroughs

According to BCG research featuring major German insurers, 52% of operational capacity is concentrated in core insurance processes and line-specific execution activities. For players using legacy core systems, this presents a major bottleneck both in terms of efficiency and profitability.

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Areas like claims handling remain among the least automated domains, with more than 90% of claim events still processed with significant manual involvement across insurance types. This one example underlines the scale of the opportunity and the competitive advantage that awaits those that transform.

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Complexity is the bottleneck holding major insurers back, with high-variance cases in claims proving resistant to deterministic automation. Cost leakage and cycle time overruns are caused by this kind of complexity, and they cannot be addressed with straight-through processing alone.

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Across insurance core processes, the addressable operational efficiency opportunity is now estimated at $5 billion annually – to tap into this, core systems capable of supporting technologies like Agentic AI are critical.

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Supporting a Top German Insurer

With around 1.5 million active policyholders, KKH (Kaufmännische Krankenkasse) ranks among Germany’s leading players in the country’s public health insurance system.

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Our expert BCG team determined that the transformation would need to extend beyond the bounds of a traditional IT project if the benefits were to be maximized. To do this, major business operations and organizational structures themselves needed to be reworked.

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The BCG Platinion team delivered on this goal by supporting the project lifecycle at every stage, including planning and setup, execution, cutover, go-live, and stabilization. Team size varied depending on the phase, reaching its peak during setup of the initial project, and again in the final months before go-live.

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Key project details:

• More than 10 systems modernized or newly introduced
• Over 600 project team members involved
• More than 10 external service provided coordinated
• Roughly 3,000 employees trained

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Enabling an Evolution

A comprehensive approach to governance and program management was required from the outset – our BCG Platinion team devised and maintained an integrated master plan spanning all work packages.

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This single source of the truth included detailed milestone planning across all sub-projects and workstreams, with interdependencies identified early, systematically documented, and continuously tracked.

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A highly precise, granular methodology meant that issues down the line were mitigated, and that effective program steering could be conducted. Progress, dependencies, and risks remained fully transparent throughout the process, supporting timely, strategic decision-making.

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"Transparency regarding progress, risks, and dependencies was critical for us. Together with BCG Platinion, we succeeded in maintaining this level of control throughout the program."

- Karin Schrader, KKH

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Regular governance and alignment forums were held, facilitated by the project team to address escalations transparently and manage cross-workstream dependencies. The clear assignment of responsibilities and standardized reporting also helped ensure effective program management.

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The BCG Platinion team handled:  

• PMO setup
• Steering committee design
• Risk management framework
• Program controls and reporting
• Dependency management

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Crucially, the program was deliberately positioned as more than just an IT transformation - business and IT teams worked closely together to develop a shared target vision. Because of this joint approach, requirements from both sides were tightly integrated in areas like data migration, process design, and systems integration.

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Cultural change also accompanied the transformation, as roles and ways of working were brought into line with a new, common understanding of the organization’s future. Transparent communication, active stakeholder engagement, and a clearly defined target vision were essential.

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The New System

‍After a record three-and-a-half-year transformation, the new KKH application landscape successfully went live in January 2026.

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In addition to the successful migration of 1.2 billion data records, more than 3,000 employees were trained and equipped to support this new era for the organization. In addition to this, the launch was achieved on the first attempt, and without any major disruptions or negative impact on the day-to-day operations of the business.

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Our priority was ensuring that business teams could work productively with the new system from day one.

- Stefanie Engelmann, KKH

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Key success factors:

• Rigorous planning and governance throughout the program
• Full transparency regarding progress, dependencies, and risks
• Robust reporting and tracking framework
• Close collaboration between business and IT teams
• Cultural transformation through new roles, ways of working, and processes

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KKH has not only modernized its system landscape, but it has also laid the foundations for a future-ready organization capable of actively shaping and embracing change.

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This program demonstrates that even the largest transformations can be delivered successfully when approached holistically. The success of this major core modernization was the result of rigorous planning, reliable execution, strong business involvement, and a genuinely collaborative partnership model.