Insurers harness the power of the cloud and reduce technology debt | insurance blog

With all the buzz around ChatGPT and generative AI, it’s important to remember that the cloud is the foundation. Insurers will need to change platforms by migrating to the cloud to enable innovation and growth through these new and 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 opens up the possibility of decommissioning legacy systems and reducing your technical debt. Some operators use their company’s enterprise cloud initiatives, while others take a hosted approach that allows them to accelerate product innovation. Others go a step further and leverage their own DevOps team to host and manage their Policy Management System (PAS) instance. A common thread among these operators is switching platforms to the cloud, which has helped them unlock value by strengthening their digital cores and the capabilities they enable.

Renews the platform for flexibility, innovation and growth

For example, a leading insurer used its company’s enterprise cloud migration to also modernize its central policy administration system (PAS) and migrate it to the company’s AWS cloud. The move provided the flexibility the company was looking for to better serve the needs of its customers through product and service innovation. In one year, the operator consolidated decades of product innovation, an insurer’s “secret sauce,” from its four legacy platforms to the new cloud PAS. In addition to reducing their technology debt, they can now build, test, and launch new products at scale—a competitive advantage in meeting changing consumer needs.

Cloud flexibility addresses changing business needs

But what about changing business needs? With many insurers offering multiple lines of business, each with different priorities, the flexibility of the cloud helps them better manage operating costs and leverage skilled resources. Take a level 2 multi-line operator, for example. They have their own instance of AWS along with an enterprise team of DevOps people who make sure the right technologies are deployed across the business and used appropriately. In addition, the team responsible for the central PAS has its own DevOps team that manages specific instances of the PAS and supporting platforms such as .net and OpenShift, along with classic WebSphere JBoss. Simply put, they connect the platform of any provider they choose to their PAS. And their PAS uses a containerized architecture, allowing them to leverage a platform-as-a-service model to scale efficiently and effectively.

Cloud for business agility and competitive advantage

Cost isn’t the only factor insurers are considering in their cloud migrations. According to a report by Aite-Novarica, insurers are placing less emphasis on cost reduction in their cloud strategies. Instead, they are looking at business agility and the new capabilities that the cloud offers. These factors can provide a much greater competitive advantage, especially when a strong, cloud-backed digital core is combined with data and AI, as our recent Total Enterprise Reinvention report demonstrates. That’s where insurers can really harness the power of the cloud. We are seeing this flexibility manifest in the form of new and innovative products launched through new distribution channels, expanding the presence of insurers in the market.

So as insurers continue to evaluate the feasibility of migrating legacy blocks to alleviate some of their technical debt and reduce costs, they are also leveraging the power of the cloud to unlock new opportunities. See how three life insurers are moving closer to the cloud in our future-ready insurers webinar.

Let’s talk about your migration to the cloud.