North American insurance companies are changing the way they use cloud. While both property and casualty (P&C) and life insurers have used cloud to increase agility, increase operating efficiency, attract new talent and reduce operating costs, there is an emerging trend in insurers viewing the cloud as a business asset. Cloud has turned into a key differentiator, enabling insurers to tap into the potential unleashed by new, disruptive technologies such as artificial intelligent and robotic process automation.
Capturing the potential of public cloud for insurance
Until now, insurers have used the public cloud for non-core and support functions, such as payroll, expense management, human resources, enterprise resource planning, backup and service desks. This is rapidly changing. While many larger insurers are building their own cloud platforms, there is a trend towards moving more and more business to the public cloud.
To achieve the benefits of moving to cloud, insurers have made cloud a top priority and core IT initiative. There are several benefits to adopting cloud-based Infrastructure-as-a-Service (IaaS) platforms on the public cloud:
- Improve speed to market through automation capabilities and the enhanced IT agility and efficiency cloud offers.
- Reduce CapEx costs by treating cloud as an operating expenditure, which is more predictable and manageable.
- Accelerate business growth through enhanced social listening, higher conversion rates, and better client communication and service capabilities.
- Expand globally through scalable cloud solutions that foster greater flexibility and standardization across geographies.
- Reduce operating and maintenance costs—cloud-based solutions can be considerably less expensive than proprietary, in-house solutions deployed on back-end server systems.
Inspired by insurtech, incumbent insurers are taking full advantage of the potential public cloud offers to launch new applications and pure Software-as-a-Service (SaaS) offerings on vertical uses cases such as policy administration, claims management and billing management. They’re exploring a full range of options, not only to streamline back office functions but to transform the customer experience.
Embarking on the journey to cloud
To clearly understand how cloud can be a business asset, insurance companies should undertake a strategic assessment, develop a blueprint for their business model, and build a clear roadmap forward. Moving business functions to the cloud requires a clear tactical vision, strong governance, durable processes, the right operating model and intelligent delivery technology. Effective cloud management and a comprehensive approach to data privacy and security will also help insurers control costs and navigate compliance.
Cloud technology is complex and rapidly evolving. North American insurers can harness this powerful business asset with a strategic, comprehensive approach and the right ecosystem to create the business models, operating efficiencies and customer experiences that will succeed in a digital era.