Health and travel fund nib Group has just announced the completion of its cloud migration. Seven data centres have now closed. According to a media release, 95% of the firm’s data and insurance systems are now with Amazon Web Services (AWS).
Is nib the first insurer of a significant size in Australia and New Zealand to finish its cloud journey?
With modesty, Brendan Mills (pictured above), nib Group CIO, compared this milestone to 2019 when his firm moved corporate health insurance business, GU Health, to AWS. nib said this was one of the earliest migrations of an insurance system of record (SOR) to the cloud in Australia.
“[Then] we weren’t necessarily looking for the sticker or the trophy,” he said. “I think you could probably say the same for this milestone.”
Jamie Simon, director of financial services for AWS, elaborated.
“In terms of customers we are working with, we see nib being very well progressed relative to peers in how far they’ve gone with the cloud migration,” he said. “Certainly, with all their existing data centres [closed and with their data in the cloud], I’m not aware of anybody else.”
What about that missing 5% asked IB?
“The other 5% is a combination of other providers and SAS offerings,” said Mills. “It hasn’t been forgotten, it’s not sitting in a data centre somewhere.”
During a roundtable discussion with journalists, Mills also detailed the challenges nib faced during a migration that has taken nearly 10 years.
“We’ve had moments where clearly it’s been quite difficult,” he said. “I think probably our biggest issue has been momentum and prioritisation.”
Mills said he would have liked the migration to have finished earlier but it was hard to get executive colleagues “excited about cloud migration,” even though they supported the move.
“It’s been quite methodical and, to some degree, rate limited in approach with a risk lens,” he said. “We’ve never used the cloud migration or the approach to infrastructure that underpins the business as a reason to not support the business growth [so] I think that’s why we’ve got to this point probably a little bit later than we wanted to.”
The changing regulatory landscape was also a significant hurdle.
“We spent a lot of time with APRA [Australian Prudential Regulation Authority],” said Mills.
This work wasn’t difficult, he said, but it was time consuming.
Inevitably, he suggested, on a project of this size over so many years, some things needed changing along the way because, for example, an application or product evolved.
The nearly 10-year time frame also meant some things needed updating or changing by the time they were ready.
“We’ve had to refactor applications that we may not have otherwise wanted to,” said Mills.
IB asked, given the sensitivity around health data, particularly after the cyberattack on Medibank Private in 2022, if there was something nib needed to see from AWS before it became so committed to cloud?
He said, from a security point of view, they are very confident in what they are doing.
“We work very closely, obviously, with the APRA guidance as well around that,” said Mills. “As we’ve looked to move these EIRs, or extreme inherent risk workloads, or systems of record, we go through an extra round, if you will, of due diligence to make sure that the highest standards are being applied to the capability both technically and from a process point of view.”
One focus of the cloud migration, said the release, is facilitating and improving nib’s AI-powered voice and text chatbot called nibby. The release said this service has “adeptly managed” more than three million customer queries.
Mills was asked how he thinks AI will change the insurance industry?
He said there isn’t a financial or insurance sector that won’t be impacted.
“So I think very, very significantly,” said Mills. “I think organisations, us included, are working through, ‘how do we start to take models and move from proof of concept factory and then start to mature those and then scale them across the organisation?’”
The CIO said there’s “a huge cultural piece” that comes with AI.
“At the moment, there’s quite a lot of unknowns and a bit of fear around AI and what it means and I think part of what we’re looking at is how we embrace that aspect of it, as well as the technology aspect because I think one doesn’t go without the other,” said Mills.
How do you see the cloud? Is it the best place for insurers to store their systems and data? Please tell us your view below.
