Other parts of this series:
Insurers often overlook the importance of cloud computing in their quest for digital transformation. They fail to recognize that the cloud is an essential component of a successful digital strategy.
Many insurers are positioning themselves to take advantage of the digital revolution that is sweeping the industry. Some companies, however, are neglecting an essential element of a successful digital strategy. They’re ignoring the cloud.
There’s a common misconception among insurers that they can achieve digital transformation without moving to the cloud. It’s a fallacy.
Cloud computing, as I pointed out in an earlier blog post, is a vital vehicle for digital innovation. Cloud platforms and services are supporting a host of digital innovations that promise to radically change the insurance industry. Digital channels, self-driving cars, blockchain, wearables and advanced analytics systems, to name a few, all depend on cloud technology. Without the cloud’s flexibility, reliability, security, capacity, and scalability, they’re just not possible.
Many new entrants to the insurance industry are harnessing the power of the cloud very successfully. They’re taking advantage of the flexibility and scalability of on-demand cloud services to target and disrupt key sectors in the insurance industry value chain that offer significant value.
As many as 82 percent of executives at established insurers acknowledge that these newcomers are disrupting their markets. To compete against these new rivals, traditional insurance firms need to embrace the cloud. Around 83 percent of insurers agree that the cloud will foster innovation in their business that was not previously possible. However, only 49 percent are currently investing in comprehensive digital technology programs as part of their overall business strategy. Cloud computing is an important component of such programs.
It’s a vital technology that drives digital innovation and increases competitiveness. Furthermore, it can also curb costs significantly.
To capitalize on the benefits of the cloud, insurers should consider these three important steps.
Prioritize and optimize migration to the cloud: Leadership teams need to assess a wide range of factors such as refresh cycles; the cloud-readiness of key applications; service demand fluctuation and change frequency; critical business functions; and shifting data requirements.
Track value realization: Simply creating a business case for cloud migration is not enough. It must be constantly validated. Key metrics should include the ratio of cloud to legacy applications, claims response times, and the number of resource hours saved. By closely tracking such metrics, companies can quickly correct deviations from their migration path and accurately plot further initiatives.
Quantify the return on agility: Measure cost savings but also gauge the additional revenue generated from the faster rollout of new cloud-enabled capabilities. Income from new digital services, for example, is an important component of the value cloud computing can offer insurers.
For further information about how insurers can benefit from cloud platforms and services, have a look at this link. I think you’ll find it useful.