Insurance companies were originally cautious about moving key business applications and functions to the cloud, but the Accenture Cloud Readiness Survey in Insurance finds they have embraced cloud demonstrating good progress in addressing organizational, infrastructure and talent issues related to cloud transition. Privacy and security concerns, as well as legacy systems, have prevented insurers from adopting cloud but now, like many companies across financial services, they are turning to the cloud to derive significant benefits in terms of costs savings, speed to market, capacity and flexibility.
Our global survey of 50 insurance company executives uncovered five key insights:
Why insurance is ready for cloud
Different insurers are seeing different benefits from the cloud. Overall, cost savings is the benefit most frequently cited by insurers in our Cloud Readiness survey. The cloud can help insurers speed up the process of bringing new products and services to market. It can also help integrate mergers and acquisitions, improve reliability and allow better customer service.
Core system functionality has been a primary concern for insurers considering the move to cloud; however, they can now take a “cloud-enabled” approach to migrating key applications. Working with multiple vendors, insurers can confidently migrate to the cloud while maintaining the effectiveness of their core systems.
Moving from strategy to action
Eighty percent of our survey respondents said they had already developed a strategy for application modernization and almost everyone else said this is planned for the next 12 months. While many insurers have already moved infrastructure functions, such as data backup to the cloud, there is still a significant gap between planning and implementation for migrating applications. Few companies have completed work on major cloud applications. Databases, analytics and business intelligent and the company website have been identified as strong candidates.
There are four key action steps insurers can take to address concerns related to their cloud strategy:
To realize the cloud's potential, insurance companies are expected to overcome barriers including talent shortages, ongoing security concerns and a lack of collaboration between IT and the lines of business. These barriers are falling quickly and, as our report details, insurers are ready to exploit cloud's transformative capabilities and power to drive sustainable growth. And Accenture can help guide insurers on this journey.