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The promise of digital transformation to boost efficiency, agility, and customer experiences while driving growth and retention makes it top of mind for most insurance companies. But change of this magnitude can be daunting and oftentimes becomes a barrier to progress.

To support digital transformation, insurers are increasingly turning to the cloud. However, many do not deeply understand the requirements and steps to migrate their core system from on-premise to the cloud.

Optimizing insurance digitalization

The cloud has many benefits but it most notably promotes flexibility, speed, simplicity, and security. Unlike on-premise digital initiatives that require upfront capital expenditures and extensive infrastructure management, the cloud provides insurers with a more agile approach. It empowers them with efficient tools that accelerate feedback cycles from users to rapidly incorporate the latest functionality into cloud-based applications.

Despite the concerns of many about security in the cloud, savvy Software-as-a-Service (SaaS) providers—especially those specializing in regulated areas like insurance—can help insurers stay on the right side of security and compliance.

Key pillars of a successful cloud migration

In the preparation process, the insurer and the SaaS provider must work together to ensure that the SaaS service level agreement (SLA) considers disaster recovery parameters and meets the businesses operational expectations, non-functional requirements, and post-migration responsibilities for managing applications. Once the SLA is vetted, both parties should collaborate to evaluate the applications and any critical dependencies prior to migration.

In addition to addressing environment-related aspects of cloud migrations, insurers must decide how often the system and the third-party data critical to core business processes will be updated. Leveraging the cloud will also change the way an organization can approach resource allocation since it frees insurers from the burden of managing and upgrading on-premise systems, allowing them to redeploy staff to strategic areas better-aligned with their core competencies.

Developing a multi-phased cloud migration plan

Insurity’s extensive experience working with more than 200 cloud clients has led to a successful five-phased cloud migration strategy for insurers.

First, the plan delves into the business and technical aspects of the migration. Phase one involves the development of a well-documented strategy featuring a migration timeline and an automated job and interface inventory that tracks how every system interacts on-premise, ensuring that the required connectivity between applications is planned for the cloud. In phase two, insurers need to define requirements that outline the functional and non-functional processes to help guide and baseline the transition to the cloud. The migration team should also work to identify any changes to workflows post-migration.

Phase three focuses on pre-migration planning and activities. During this phase, insurers implement required connectivity for the remaining on-premise systems to access the cloud while also building a path for the core system to move beyond the firewall. Before the next phase, a post-migration support plan must be established, identifying the third-parties required to manage all the various aspects of the environment.

Once pre-planning is complete, the cloud migration occurs in phase four with regression testing, ensuring that any changes and/or new features resulting from the migration do not comprise existing operations, and that the cloud application meets the business needs in the same manner as did the on-premise application. Lastly, phase five involves validating the post-migration support plan that will extend over the lifetime of the cloud-based application. ensuring that the appropriate teams are engaged to support day-to-day and after-hours processes.

A successful cloud migration needs a foundation based on setting goals to successfully lead insurers down the path of digital innovation.

For more information on cloud migration, read my three-part byline article series, published by Information Management:

Part 1: 3 ways the cloud boosts insurance digitalization

Part 2: 5 ways to ensure cloud migration success

Part 3: 5 steps to cloud success for insurers