Are insurers’ heads in the cloud?

We are all adjusting to new ways of living and working and one such adjustment, I’m sure many of us have now encountered, is the virtual conference. Beyond the obvious upsides such as not having to deal with the travel, the jet lag, the hotels, and the bad coffee, the virtual conference experience has been an interesting and enjoyable one.

Judging by the conversations at events I have recently ‘attended’ there is still plenty of work to do as people adjust to new ways of working, but what has been encouraging to see is that voices in the industry are proactively discussing how we can move forward, instead of how we can make do, over the coming months. Inevitably some, such as Saga and Nationwide, were better placed at the start than others to adapt to this change, but the stories of the energy and dedication to the cause of adopting new ways of working have been impressive.

The current situation has only accelerated the efforts of insurers, like AXA UK, to find new ways to meet their objectives. This includes trying to engage with their customers more efficiently and conveniently, trying to innovate with new products or bring existing products to new channels, or trying to grow their business by making better and smarter decisions.

Achieving any of these goals ultimately comes down to whether you have the IT capability to scale up or whether poor systems become a bottleneck for progress.

Before the COVID-19 pandemic, there were plenty in the insurance industry who were looking to the cloud – public, hybrid, or private – and making use of its benefits. Insurance customers were already looking for an improved customer experience and the cloud was increasingly the route to delivering that.

Now the need to leverage cloud technology is far more urgent. For insurers, moving more data and workflow to where there is more than ample compute power and secure data storage makes real sense when trying to facilitate dispersed workforces and effectively tackle huge levels of demand. Yet it is good to remember that the hype of “cloud now” is in line with changes that we were already beginning to see with a wider migration to cloud computing models across all industries. And, in the case of the European insurance industry, local cloud computing infrastructure and services have matured just in time for any accelerated move to the cloud.

One potential impact of COVID-19 is that customers, particularly businesses, will want to have far greater insight and control over what they are covered for. If insurers want to be able to meet this demand, then the ability to innovate and deliver new products at pace will be absolutely crucial.

Ultimately, for insurers to do the things they want to do, like engaging with their customers more frequently and productively, or innovating faster, they need the agility and the speed that the cloud offers them and they need to see it as part of their core systems and not only reserved for greenfield projects or digital-first start-ups.

It should be acknowledged that the move to cloud is not only being driven by factors from within the insurance market, however. Wider developments in technology and the way that we use it in our day-to-day lives are also necessitating the adoption of cloud platforms. Aside from COVID-19, businesses were expected to spend $1.1 trillion on IoT projects in 2023. Whilst this may be impacted by the outbreak, it is expected that IoT will continue to be a notable growth market. If insurers want to tap into the structured and unstructured data insights that IoT devices could provide, they need the elasticity and compute power of the cloud in order to organise, process and analyse it.

Cloud-based core platforms are more than purely a means to running core business processes. By integrating with digital interfaces, taking advantage of analytics capabilities, and being able to integrate data from any source, cloud technology offers insurers the ability to accelerate innovation, ensure technical currency, and deliver products and services that satisfy, or even exceed, customer expectation.

This article was published originally in Finextra