Lift-and-shift cloud migration gives you a cloud bill without cloud benefits -- and the insurance industry has learned this lesson the hard way.
Moving a monolithic policy administration or claims system to a cloud VM preserves all the operational overhead of the original system while adding egress costs. The elasticity, managed services, and developer velocity that justify cloud investment only materialize when systems are rearchitected to take advantage of them.
Successful cloud migrations for core insurance systems involve decomposing monoliths into services, adopting managed databases, leveraging auto-scaling for processing-intensive workflows like batch renewals, and eliminating on-premises dependencies one by one.
The carriers that have completed genuine cloud transformations -- not just hosting migrations -- are reporting meaningful reductions in infrastructure cost and significant improvements in release frequency.
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