Propelling Employee Benefits Insurers to New Heights with Strategic Cloud Migration !

Ascending to the Clouds

The benefits of cloud migration are becoming increasingly valuable for employee benefits insurers without the infrastructure to support their systems. Moving to the cloud allows carriers, including brokers, to store and manage databases, offer services without the overhead, and open the doors to digital systems without constraints.?

However, most insurers still vastly undervalue the cloud’s potential. McKinsey research shows that the EBITDA run-rate impact of the cloud on the insurance sector will be $70 billion to $110 billion by 2030.??

Advantages of Public Cloud Migration?

Avoid costly upfront investments??

One of the most limiting factors for the growth of an employee benefits insurance company is the upfront capital to invest in competitive technology. Traditionally, engaging on the same level as enterprise competitors meant investing thousands of dollars in infrastructure to support the day's technology.??

Cloud computing companies like Microsoft Azure generally bill month-to-month for their infrastructure, which is more manageable for growing organizations. You rent rather than own. If you ever become dissatisfied with your cloud provider, you can switch.?

Benefits of a built-in support team?

Once you’re working on a cloud system, you get the benefits of an extended team. Not only does this reduce strain on yours, but it will also reduce your long-term IT costs. Depending on your contract, you won't have to worry about the time, fees, or staff required to make system upgrades or fix any hiccups in the system.??

Almost all cloud providers guarantee upwards of 99.95% service level uptimes, which means their systems are always available, and your clients will always get the services they expect. This will reduce strain, allowing you to serve your clients better and do what you do best.?

Reliable security?

Those same teams taking care of your system updates also work around the clock to ensure their cloud platform is secure. In addition to resources, cloud solutions bring operational best practices and security standards, along with regular monitoring, patches, and system fixes, to ensure robust security you can depend on without added investments.?

Scale your business and open new revenue streams?

As your organization grows and software needs to evolve, you’ll have an external partner whose system can grow with you. You won’t have to reinvest in new infrastructure to accommodate the need for more storage or capacity. Cloud applications offer virtually infinite growth to meet your business's and client's demands—at any size.??

For example, McKinsey says one insurer announced a new direct-to-consumer business targeting gig workers and retired baby boomers, enabled by a host of cloud-native services, including AI-based chatbots, data services, and automated workflows.?

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AI (Artificial Intelligence) and Microsoft Co-Pilot?

The public cloud can provide you access to cutting-edge technologies. One example is Microsoft Copilot, a generative AI assistant offering innovative solutions across the Microsoft Cloud. Tools like Microsoft Co-Pilot make it easy to streamline processes and replace everyday tasks through automation and workflows. This frees up employee time, allowing a better focus on innovation and customer service while you grow your business.?

This spring, Majesco? has partnered with Microsoft to launch Majesco Co-Pilot, which will enable carriers to close claims, manage communications, and effortlessly use the power of AI.?

Challenges of Migrating?

Data Compliance and Migration from Legacy?

? One critical challenge of public cloud migration is not having complete control or ownership of data and cloud infrastructure. This can make it challenging to comply with industry data security regulations. Some carriers choose to go with the private cloud to get complete ownership of their data.?

It's also difficult to migrate from a legacy system. A study by Novarica finds only one in ten large insurers report an infrastructure that is less than half legacy. Legacy systems have intricate dependencies and integrations that must be carefully migrated to the cloud without disrupting business operations. You'll also need to compliantly transfer large volumes of sensitive customer data to the cloud, which can be complex and time-consuming. However, with the public cloud, you can leave this to data security and migration experts.?

Disruptions and Downtime?

Another problem with moving to the cloud is when the cloud goes down. Just like private hosting, public hosting can have disruptions and downtime, which can cause business processes to be halted. For example, in 2017, Amazon Web Services (AWS) went down for just four hours. Even that relatively brief period of downtime cost companies in the S&P 500 index an estimated $150 million. Additionally, 80% of small businesses have experienced downtime at some point in the past, with costs ranging from $82,200 to $256,000 for a single event.?

While you can't control when downtime or outages will happen, you can control your team's preparation for it. Adopting best practices for cloud outages and cloud resilience can go a long way in mitigating outage effects on your business.???

Public vs. Private Cloud?

In the realm of employee benefits insurance, the choice between public and private cloud boils down to a trade-off between flexibility and control. A private cloud consists of cloud computing resources used by solely one business. They are physically located at your organization's on-site data center and maintained in a private network. A private cloud can make it easier for your business to customize resources for specific IT requirements and provide greater control over data.?

Conversely, the public cloud offers a built-in support team, scalability, and cost-effectiveness, ideal for handling fluctuating workloads. Many insurers expect to significantly ramp up adoption and migrate a growing share of their compute environment to the public cloud within the next five years. That intention is reflected in the projected 32 percent annual growth in cloud services by 2025.?

Ultimately, the decision-making process for employee benefits insurers considering cloud migration involves a careful evaluation of various factors. It's about finding the right balance between technological capabilities, cost efficiency, regulatory compliance, and the specific goals and circumstances of each provider. By weighing these elements thoughtfully, insurers can tailor their cloud strategies to enhance their services, streamline operations, and ultimately deliver greater value to their clients and stakeholders