With costly, out-of-date legacy mainframes in need of upgrade, AIG's commercial arm turned to Amazon's Web Services to bring the carrier’s commercial claims operations to the cloud.

The agreement, announced Jan. 17, also reduces AIG’s IT capital spending and turnaround time on new products, Jim Gouin, CIO of Americas and global claims for the carrier, said at Amazon Web Services' Summit in New York Monday

Presenting with Deloitte’s Insurance Cloud Lead Keval Mehta, who served as consulting partner on the project, Goin explained, "Each year, we budget for 1000 projects in September, knowing we will probably only do the top 50. By the time we order and receive new servers and [IT professionals] get around to testing, it’s June or July. Cloud reduces that timeline to 90 days for a minimum viable product.”

AIG’s transformation began by piloting the conversion of claims data from its four legacy mainframes in the Northeastern and Southwestern parts of the U.S. to an open-source cloud server. It then connected to AWS’ platform, which currently serves as the primary database, with AIG’s server running in the background.

Prior to its selection of AWS, AIG had considered taking the hybrid or private cloud route, Gouin said, but found the technology being leveraged from the third-party vendor was too complicated to replicate. By completion, the company had adopted new computing, storage, application and caching services from AWS.

“We wanted a vendor with a cloud competency that we didn’t have,” he said, adding AIG next plans to expand its cloud capabilities to benefit agents on the policy side. It also intends to move its entire workers’ compensation book to AWS. “Claims only represent us crossing the finish line with cloud,” he concluded.