Core modernization is increasingly taking place in the cloud. Insurer adoption of cloud technology has had a general trajectory from hosted ancillary applications and systems of engagement to de novo implementations of new systems to support greenfield efforts and new lines of business.
Now, many insurers are moving entire core systems to the cloud and seeing quantifiable benefits in flexibility and speed to market—and, lately, cost. ProSight, a winner of a Novarica Impact Award in the Core category, created value in all three of these areas.
ProSight upgraded its cloud-based billing and policy systems in nine months as a capstone project to multi-year core system transformation efforts. The upgrades allowed the company to decommission legacy systems, saving over $1M in operating expenses and rationalizing its environment to single systems for policy, billing, claims, and reinsurance.
The company’s cloud infrastructure also enabled a new product development cycle of 30 to 45 days. During the upgrade year, ProSight went live with five new products, which have generated $7.7M in new business. A parallel effort increased the number of customers on direct bill by 50%
The project built upon four years of prior cloud transformation work, which created a foundation to avoid schedule and cost overruns. The team made detailed plans for upgrading and decommissioning systems to ensure the effective utilization of key resources and developed a data conversion process to migrate multi-year policies to the new cloud systems.
Insurer adoption of cloud has expanded over the last two years—now, insurers of all sizes and sectors are accelerating plans for cloud migration. Cloud platforms’ use of microservices architecture can facilitate more rapid upgrades when insurers don’t heavily customize functionality, which can frequently happen during on-premises deployments.
“Decommissioning legacy systems” is also a crucial element of this value proposition, especially in core systems migrations. It was a critical factor in how ProSight’s cloud transformation was able to generate savings. Often, the transformational savings insurers anticipate from core system replacement project business cases fail to materialize because they are unable to move off their legacy system completely. Rationalizing technical environments to single core systems is a noteworthy accomplishment.
Last month, Novarica announced the winners of the ninth annual Novarica Research Council Impact Awards. These awards recognize insurance technology projects that demonstrate real business impact and are selected by insurer CIO members of Novarica’s research council.
Over the next several weeks, we’ll continue taking an in-depth look at each of the eight winning case studies. Case studies for all winners and 20 other IT projects considered for the Impact Awards appear in this year’s Insurance Technology Case Study Compendium. More than 100 case studies from the last five years are available in Novarica’s research library.
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