The buzz surrounding ChatGPT and generative AI is intriguing, but it’s essential to recognize that the cloud is the backbone of these technologies. Insurers are now looking towards migrating to the cloud to drive innovation and growth through these new advancements. Evaluating their legacy systems is crucial for them to determine the potential business value in converting them. This shift opens up avenues to decommission outdated systems and reduce technical debt. Some insurance carriers are embracing their company’s enterprise cloud initiatives, while others are opting for a hosted approach to expedite product innovation. Furthermore, there are those going one step further by utilizing their DevOps team to host and manage their policy administration system (PAS) instance. A common trend among these insurers is the replatforming to the cloud, which has proven beneficial in enhancing their digital cores and associated capabilities.
For instance, a prominent insurer utilized its enterprise cloud migration to modernize its core policy administration system (PAS) and transition it to the company’s AWS cloud. This strategic move provided the flexibility needed to enhance customer service through innovative product offerings. Within a short span of one year, the carrier consolidated decades of product innovation from four legacy platforms onto the new PAS in the cloud. This consolidation not only reduced technical debt but also empowered the insurer to develop, test, and launch new products efficiently, giving them a competitive edge in meeting evolving customer demands.
The ever-changing business landscape poses unique challenges for insurers offering multiple lines of business. Cloud flexibility enables them to efficiently manage operating costs and leverage specialized resources. Take, for example, a Tier 2 multiline carrier that maintains its AWS instance and an in-house DevOps team to ensure optimal technology deployment across the enterprise. Additionally, the core PAS team has its dedicated DevOps experts managing specific PAS instances along with supporting platforms such as .net and OpenShift, alongside classic WebSphere JBoss. This adaptable setup allows them to integrate various vendor platforms seamlessly with their PAS, paving the way for a containerized architecture that facilitates scaling through a platform-as-a-service model.
While cost remains a significant consideration in cloud migrations, insurers are now prioritizing business agility and new capabilities that the cloud offers. Reports indicate that insurers are shifting their focus towards leveraging cloud technology for competitive advantages and enhanced agility, particularly when combined with data and AI capabilities. This synergy is becoming increasingly evident through the successful launch of innovative products via new distribution channels, expanding insurers’ market reach and impact.
As insurers explore the feasibility of migrating legacy systems to alleviate technical debt and cost burdens, the adoption of cloud technology presents a wealth of new opportunities. Discover how leading life insurers are harnessing the power of cloud in our engaging Future-ready insurers webinar. If you’re considering a cloud migration strategy for your business, let’s initiate a conversation to explore the possibilities and benefits it can bring to your organization.
