Insurance companies’ rapid shift to cloud for core functions has taken the industry by storm in 2016, especially among mid-sized companies. A major focus for these carriers has been improving IT operations and service costs.
ProSight Specialty Insurance is now undergoing its own transformation. Until recently, the New Jersey-based company managed its IT infrastructure through various hosting providers, which gobbled up 20% of its total IT budget, according to chief digital officer Darryl Siry.
“We had undergone a data center transformation, yet our infrastructure costs were higher than we thought they would be,” said Siry. “We weren’t happy with our environment. It did not offer the service or flexibility we wanted.”
Siry began looking for new alternatives to run ProSight’s IT inititatives in 2015. After reviewing a few vendors, he settled on two finalists: Microsoft Azure and Amazon Web Services. Both are cloud-based.
ProSight ran proof of concept tests to decipher which of the two vendors was best equipped to fix the specialty carrier’s troubles. The winner, Amazon Web Services (AWS), was selected in June because it proved to be more cost efficient, Siry explains.
“We are an innovative company,” he says. “It wasn’t about convincing my superiors that we should speak to these companies. We had to prove that it [a shift to cloud] would work.”
Cloud is not only more cost effective, but also offers the flexibility to spin up new environments in seconds and expand computing power, Siry said. However, a project of this magnitude is not without its challenges.
“As you start to design in the AWS environment there are some things you have to work out. You can be so used to old, traditional IT infrastructures,” he said. “Also don’t assume that third party applications will move from one provider to another without a problem. You have to troubleshoot everything.”
ProSight, underwriter of restaurant, construction and marine insurance, is more than halfway done moving its IT systems to the cloud with AWS and 2nd Watch, an AWS service partner.
Siry projects that the implementation will be complete by Dec. 17. The move is estimated to save the insurer 30% on its IT management costs. Those funds will be used towards investments in customer-facing services, such as digital products for agents, customer portals and mobile claims apps, he says.
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