With all the buzz surrounding ChatGPT and generative AI, it’s important to remember that the cloud is the foundation. Insurers will need to re-platform by migrating to the cloud to enable innovation and growth through these emerging technologies. At the same time, they are taking a hard look at their legacy blocks to determine the business value of converting them. Doing so can decommission legacy systems and reduce their technical debt. Some operators are using their companies’ enterprise cloud plans, while others are taking a hosted approach to accelerate product innovation. Still others go a step further and leverage their own DevOps teams to host and manage their Policy Administration System (PAS) Example. What these operators have in common is that Re-platform to the cloudwhich helps them unlock value by strengthening their digital core and the capabilities it supports.
Re-platform for agility, innovation and growth
For example, a leading insurance company used the company’s enterprise cloud migration to modernize its core policy administration system (PAS) and move it to the company’s AWS cloud. The move provides the flexibility the company seeks to better meet customer needs through product and service innovation. In one year, the operator consolidated decades of product innovation—the insurance company’s “secret sauce”—from its four legacy platforms onto a new PAS in the cloud. In addition to reducing technical debt, they are now able to build, test, and launch new products at scale, a competitive advantage that meets the rapidly changing needs of consumers.
Cloud flexibility to meet changing business needs
But what if business needs keep changing? With many insurance companies offering multiple lines of business, each with different priorities, cloud flexibility is helping them better manage operating costs and leverage skilled resources. Take Tier 2 multi-line carriers, for example. They have their own AWS instance and an enterprise team of DevOps people to ensure the right technologies are adopted and used correctly across the enterprise. Additionally, the team responsible for core PAS has its own DevOps team that manages specific instances of PAS and supporting platforms such as .net and OpenShift as well as classic WebSphere JBoss. In short, they plug their chosen vendor platform into their PAS. Their PAS uses a containerized architecture, which allows them to leverage a platform-as-a-service model to scale efficiently and effectively.
Cloud enables business agility and competitive advantage
Cost isn’t the only factor insurance companies consider when migrating to the cloud. according to a Aite-Nowalika Reportinsurance companies place less emphasis on cost reduction in cloud strategies. Instead, they are focusing on the business agility and new capabilities the cloud provides. These factors can provide greater competitive advantage, especially when a strong cloud-based digital core is combined with data and artificial intelligence, as our recent report demonstrates Comprehensive Enterprise Reinvention Report. This is where insurance companies can really harness the power of the cloud. We see this flexibility playing out in the form of new innovative products launched through new distribution channels, expanding the market footprint of insurers.
So while insurance companies continue to evaluate the feasibility of migrating legacy modules to alleviate some of their technical debt and reduce costs, they are also leveraging the power of the cloud to drive new opportunities. Learn how three life insurance companies are using cloud technology in our websites Insurers of the Future Webinar.
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