Where Do Insurers Get the Highest Value from Cloud Operations?

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DevOps and the cloud are powering change and delivering business value to insurers, as CSAA Insurance Group discovered via an automated testing environment upgrade and an AWS migration

The value of the cloud means different things to different people. Security, scalability, and rapid provisioning of infrastructure are often mentioned and understood. And then there is software development and IT operations. The mashup of both is called DevOps and it is changing the speed to value equation of technology initiatives and is itself powering cloud adoption. For insurers faced with product complexity and managing large transformations, cloud-based DevOps offers tantalizingly tangible speed to value. And panelists in a session at the IASA 2017 conference explained how it all works and provided a stellar instance of where one insurer realized tremendous value.

Insurers take the bridle in the race to value

As insurers look to be nimble they are embracing DevOps. The approach has – for a number of years – been the solution delivery modus operandi of retail and tech titans such as Target, Netflix, and Amazon and helped power their legendary customer responsiveness and speed to market. Encumbered by greater product complexity than most and by large legacy systems, insurers come late to the game.

In short, DevOps is developers collaborating with IT operations to automate infrastructure provisioning, orchestration, and software deployment and management. It removes the barriers between the code makers and the code deployers and in so doing it removes much of the latency that has existed for years around software development.

According to Keven Lincoln, VP of cloud and managed service solutions at EIS Group and a panelist on the IASA session, in the same way that Agile development techniques represented a breakthrough in how developers worked with business professionals to deliver solutions much more efficiently, DevOps is transforming the way developers and IT operations deploy and test both code changes and infrastructure changes. DevOps is the natural evolution of Agile development techniques, now possible for infrastructure provisioning and orchestration as well as application deployment and monitoring. Co-panelist Peter Williams, AWS global technology lead for financial services, agreed that DevOps is pivotal to modern software development and deployment.

Deep value in DevOps

Now we get to the crunchy “tangible” part of the DevOps value for insurers. Our contender for the title of highest value is automated software testing.

Lincoln explained how software testing in the DevOps model lies within the continuous integration/continuous delivery (CI/CD) practice and is highly dependent on a cloud environment. In CI/CD, members of a development team integrate their work frequently (vs. saving lots of changes for a “big bang” integration) and the software can be released in shorter cycles. The result is higher quality software, faster. Continuous integration testing is critical to the result.

“You have to visualize the challenge of a part manual, part automated process of multiple teams in multiple locations with separate software development tracks trying to merge their code into a shared common code-base, on a regular basis, and making it all work together,” says Lincoln. It is a Sisyphean feat where the ball rolls back often on your toes. It is painful but you keep valiantly pushing the ball upward. 

A stop to testing that runs off the track                                                                       

The upward push proved to be too arduous for the diligent but strained testing resources at CSAA Insurance Group. “Halfway through a multi-year policy administration transformation initiative, we could see the compounding increase in requisite testing would soon challenge our ability to continue at the current velocity,” says panelist Kim Bissell, director of policy administration services at CSAA Insurance Group. “As we rolled out new products and capabilities within our personal lines operations we could see the growth of necessary testing rising exponentially and the time it took forever lengthening.”

It was a wakeup call, explained Bissell, when the PAS transformation team calculated that the result could be a lengthy implementation delay with significant cost overrun and a subsequent delay in the realization of benefits of the transformation program. The effects were estimated as a one-year delay at a multi-million dollar cost. At that point, EIS Group, the PAS transformation partner, was approached to help with a solution.

The answer was the implementation of EIS’ cloud-based automated testing framework to provide continuous integration testing of multiple parallel workstreams. The results were remarkable:

  • A labor reduction and test coverage increased from 3,300 automated and 4,400 manual tests to 22,000 automated and only 240 manual tests;
  • A savings of 75% in the time it took to complete full regression testing with 90% of regression testing automated vs 50% previously;
  • A 50% increase in early detection of regression test defects; and
  • A 60% reduction in production defects.

Kicking it up a notch: a move to AWS

That was not the end of the process improvement, however. When CSAA decided at a later time to move the EIS automated testing framework from a private cloud environment to the AWS cloud, it achieved a further 40% improvement in execution time and 35% reduction in environmental defects.

“Product complexity – driven by regulatory compliance unique for each state, other rating, underwriting and distribution factors, and multiple system integrations – places extraordinary demands on dev/test systems and it is a prime example of where the synergy of cloud deployment with DevOps brings massive value to insurers,” says Lincoln. 

In our experience, automated testing is a winner in the category of highest value from cloud deployment. What are your winners? Let us know what else you think should share the podium.

Kevin Haydon is director of marketing and communications at EIS Group. See more blogs by Kevin here.