The issue that many carriers are beginning with is surprisingly straightforward:
What is the benefit of maintaining our legacy systems? For the majority, the truthful response is: not much. This is the reason for the change—a purposeful replatforming to the cloud. This is a strategic unburdening, not merely a technological update. Insurers are releasing themselves from the burden of technical debt and setting themselves up for quicker innovation by relocating vital systems, such as policy administration, into contemporary cloud platforms.
Cloud is an enabler, not just a platform.
In order to innovate without starting from scratch, some insurers are choosing hosted cloud solutions, while others are leveraging larger enterprise cloud initiatives. The bravest are choosing flexibility over reliance by deploying in-house DevOps teams to manage and develop their own cloud-native PAS (Policy Administration System) instances.
Adaptability Above Cost-Reduction
It is easy to present cloud adoption as a way to save money. However, astute insurers are aware that is missing the point.
Aite-Novarica research claims that most insurers are more interested in agility than in saving money. They may introduce new items through new distribution channels, test them in-market, spin up new products, and even change their brand footprints thanks to cloud computing. When you combine the exponential potential of AI and data, you have a competitive edge that extends well beyond line-item savings.
This pattern is consistent with our research on Total Enterprise Reinvention, which shows that businesses that embrace cloud transformation as a foundation rather than a feature perform better than those that experiment.
What Comes Next?
Insurance companies are still calculating which legacy blocks should be sunsetted completely and which are worth changing. Even yet, they are increasingly using the cloud for what it makes possible rather than merely what it takes away.
The cloud has evolved beyond IT to include operational flexibility and product velocity. It is a business plan. One that is enabling progressive insurers to proceed into the future more quickly, intelligently, and freely.
