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Cloud Adoption Considerations: Tips and Approaches for Insurers

For many insurers, cloud represents both a significant opportunity and challenge. Although the need for cloud is generally undisputed in this day and age, IT leaders must consider and balance a range of factors and concerns when actually leveraging the cloud. As part of the 2020 PAMIC Conference, panelists from Pennsylvania Lumbermens, Farmers Alliance Mutual Insurance, and ValueMomentum participated in a session focused on cloud adoption considerations, trends, and approaches derived from insurers’ experiences.

Erin Selfe, Chairperson of the PAMIC IT Committee, kicked off the entirely virtual summit session. Joining the session as panelists were BJ Gardner (BJ) from Pennsylvania Lumbermen’s, Andy Edwardson from Farmers Alliance Mutual Insurance and Gopikrishna Gade (GK) from ValueMomentum. With a broad and deep knowledge and experience base—specifically in the area of implementing actionable IT strategies for insurers—the panelists jumped right into the topic, providing a holistic overview of cloud adoption considerations and approaches.

Trends, Considerations, and Insurer Cloud Adoption Journeys

Gopikrishna Gade (GK) from ValueMomentum started the session by providing an outline of the various routes that enterprises are taking to meet digital needs and demands. His session touched upon the disruptive shifts impacting enterprises’ IT landscape and the need for IT leaders to manage the progressively increasing complexity resulting from these shifts.

Like a city mayor overseeing a city that has to serve multiple constituents, managing this complex landscape requires IT leadership to focus on efficiently orchestrating the multiple environments and workloads. GK then touched upon the advancements in the technology landscape that can help IT Leadership set up their enterprise-specific Digital Platforms—a move that would allow IT departments to play a transformative role as a strategic orchestrator for the enterprise. GK then passed the baton to BJ and Andy, who covered possible transition paths to cloud adoption in insurance.

BJ Gardner (BJ) from Pennsylvania Lumbermens (PLM) demonstrated how an organization can thoughtfully and methodically approach cloud by sharing PLM’s three-stage journey to cloud. In the first stage, PLM moved from bare-metal to virtualization, while also moving offsite for disaster recovery. Even with the introduction of virtualization, BJ explained that the economic approach for IT infrastructure spend was still CapEx centric. Moreover, PLM’s attempt to expand their Data Center resulted in growing pains due to aging hardware.

This led to a major decision point, in which PLM had to reconsider the direction they wanted to take. A key question, according to BJ, was whether PLM should invest in CapEx to modernize their hardware. PLM decided to dip their toes into Cloud with an initial workload by using a private cloud for Storage, and delivering their Data Center as a Service for their imaging workload. At the same time, PLM also transitioned management of their aging e-mail infrastructure to a hosted email service in a SaaS mode.

The third stage of PLM’s cloud journey was triggered by their Data Center’s declining real estate footprint. As a result, PLM decided to accelerate their migration to cloud. This initiative included shifting multiple workloads and core systems from the private Data Center to the cloud; shifting e-mail from a hosted server to a public, SaaS provider; and transitioning disaster recovery from private cloud to Disaster-Recovery-as-a-Service. At this time, PLM is expanding its adoption of Public Cloud, including leveraging Platform-as-a-Service for its Databases.

Andy Edwardson from Farmers Alliance Mutual Insurance (FAMI) continued the conversation by describing how Farmers Alliance Mutual Insurance (FAMI) has made initial forays into public Cloud – such as Productivity & Collaboration (SaaS) and HR (SaaS) and Claims Estimation (SaaS).

Andy outlined a top down approach in which any given IT initiative has to be understood from the lens of whether it can contribute to profitable growth by enabling progress on efficiency and value vectors. Equally important to consider is enhancing levels of customer engagement with both agents and customers, and treating everyone as customers.

Andy demonstrated the importance of creating and following a strategic IT roadmap by sharing how FAMI looks at its strategic IT thinking – with progressively increasing value – starting from Intelligence & Analytics, and then moving onto scalable and efficient operations on the cloud, and then to FAMI Digital Services and reaching enhanced levels of customer engagement.

Both PLM and FAMI had to consider a wide host of factors when moving to the cloud. Beyond just cost savings, it was important for the two organizations to identify specific drivers for cloud and align their cloud initiatives to their larger enterprise goals. While PLM steadily scaled up their cloud efforts to adapt to emerging needs, FAMI chose to align their cloud initiatives to their larger strategic IT roadmap from the outset.

Moving to the cloud is an imperative for meeting the needs and demands of the digital age. Hear more details about these insurers’ journeys and get other tips for cloud adoption by listening to the on-demand session: Public Cloud: Why Carriers Should Welcome This Shift & How to Prepare.