Australian health insurer nib’s cloud migration started in 2015. However, it wasn’t until nine years later, in 2024, that it was able to complete the migration of 100% of on-premise workloads, 95% to Amazon Web Services and the remaining 5% to other cloud platforms.
nib Chief Information Officer Brendan Mills said project prioritisation proved to be a challenge, with IT balancing growth-related business projects alongside the migration. He said the finished project positions nib well for using AI, which is being piloted for a number of use cases.
SEE: Comparing cloud options? See our comparison of AWS with Google Cloud.
Who is nib, and why is its cloud migration a big deal?
Australia’s nib is a Top-100 ASX-listed private health insurer. With a group revenue of AUD $1.7 billion last year (US $1.1 billion), it offers health and medical insurance to 1.6 million Australian and New Zealand residents, and paid out $1.2 billion in claims during the last reporting period.
In addition to being among Australia’s largest health insurance players, nib is also:
- An Australian top three player and global distributor of travel insurance.
- A leading provider of health insurance for international students and workers in Australia, where it insures around 200,000 international students and workers.
- Has an interest in Australia’s National Disability Insurance Scheme, where it has done several acquisitions and helps 40,000 participants through its nib Thrive business.
- Maintains a majority stake in medtech organisation Midnight Health, which has provided access to healthcare through telehealth services to more than 160,000 Australians.
- Has a data science and service joint venture with Cigna Corporation called Honeysuckle Health.
nib’s size, footprint and operations in a regulated industry mean its all-in move to the cloud is significant. The project needed to consider key risks such as paying insurance in a timely manner to customers, safeguarding customer data and minimising risk for investors.
Why did nib decide to move everything to the cloud?
nib first started to experiment with the cloud in late 2015. Mills said that, like many large Australian corporations, it started small with a view to accelerating quickly. The business was primarily motivated by the agility that it believed moving to the cloud could bring.
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The shift to the cloud was not all by design. Through merger and acquisition activity and growth, including the operation of a large travel insurance arm, nib had seven disparate data centres; one of these was nib-owned, while the others were a combination of co-located data centres.
“We saw the benefits of a more focused investment in technology that would benefit our customers, as opposed to managing data centres and infrastructure,” Mills explained.
Moving a primary insurance system of record to AWS
In 2019, nib migrated its corporate health insurance business GU Health to AWS. This marked a significant increase in its use of cloud services, and one of the Australian health insurance industry’s earliest migrations of an insurance system of record to the cloud in Australia.
Through the final stages of the migration, nib has moved other multiple Extreme Inherent Risk systems. “By transferring these EIR systems, we’ve further fortified our technology backbone, ensuring that critical operations are running on advanced and resilient platforms,” Mills said.
Key learnings from nib’s epic cloud migration project
nib achieved the migration of 95% of its on-premise workloads into the AWS cloud in February 2024, after the closure of the last of its seven data centres. Mills said the remaining 5% of its workloads are supported by other cloud providers and SaaS systems. These are some of the learnings from this cloud migration project.
Choose a cloud provider aligned with your cloud strategy
Mills said AWS was selected as the health insurer’s primary cloud partner on the back of its product set, its scale and its strong ability to partner with customers. nib is maintaining a 5% toehold with other providers as a deliberate strategy to provide it with future optionality.
This was a consideration for nib as well as insurance regulator APRA, who is fully aligned with nib’s approach. “I’m not suggesting we will up our tent and move campground, but some of those applications have been refactored, and we have some optionality around some of those.”
Internal prioritisation can place pressure on project timeframes
The biggest project issue was the momentum and prioritisation hurdles encountered after the project started in 2017. Mills admitted that “we would have liked this to happen earlier,” even though nib was still taking a very methodical and risk-conscious approach to the project.
Mills explained that it is often “hard to get executive colleagues excited about cloud migration” and that cloud and infrastructure was never seen as a reason not to support business growth. This meant balancing priorities between other business technology needs and the migration.
Working with regulators can require significant time investment
nib worked closely with APRA to meet its stringent cloud adoption standards and requirements. This is considered critical for systems of record, which maintain information essential for an institution to determine its obligations to customers and counterparties.
Mills said nib spent a lot of time throughout the process consulting with APRA, including working up artefacts and providing information on its migration to ensure that it aligned with cloud computing guidance. He said, while he would not call this hard, “there was a lot of it.”
SEE: The challenges and benefits of cloud migration
Expect technical challenges as products and applications evolve
There were some technical aspects encountered throughout the project; Mills said this occurred in some cases where a product set had evolved or applications needed refactoring. However, he said the business went in with “eyes wide open” to these possibilities.
Entrench cloud optimisation as an “evergreen and ongoing” process
The health insurer’s cloud optimisation is something that it continues to look at. Mills said this sees the business sitting down “shoulder to shoulder” with AWS to look at cloud spending through a finops lens to optimise and ensure it is “paying for the right things.”
What benefits does nib expect after its cloud migration?
Mills said the completed cloud migration will provide nib with an expansive environment that can be dialed-up or down, which is also cost efficient and allows better member data analytics.
“The move is very much a strategic decision on many fronts,” he said.
“We are confident about the environment; AWS provides us with agility and flexibility, and allows nib to build capability in the way we operate our business and contain costs.”
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AI use cases being explored across nib’s business
nib expects the cloud to allow it to expand its current use and future exploration of artificial intelligence. The health insurer is already experimenting with or deploying use cases for generative AI in a number of areas, including “nibby”, an AI-powered voice and text chatbot.
nibby, which had managed 3.2 million customer queries since its first launch in 2017, was developed and enhanced using AWS services, including Amazon SageMaker and Amazon Lex. SageMaker is designed to help organisations build, train and deploy machine learning models, while Lex is a managed AI service for building conversational interfaces.
