Other parts of this series:
What are the trends and opportunities driving cloud adoption among European insurers?
Sixty-seven percent of 400 CIOs surveyed in 2016 believed that software as a service (Saas) would transform the insurance industry in five years or less. In my previous post, I explored examples of European insurers and global insurtechs that are already using cloud to drive growth and innovation.
The future is here, and it’s in the cloud. What are the trends and opportunities driving cloud adoption among European insurers?
Four reasons why more insurers are moving to cloud
Several factors are driving today’s insurance companies to move their applications and data into the cloud as they reassess their business opportunities. These factors are:
- The need for increased agility
- Access to disruptive technology that promotes innovation
- The need for technology operating efficiencies
- The possibility of reducing infrastructure costs
Three key cloud trends
Cloud and data are two technologies at the heart of insurers’ digital transformation. Data, supported by cloud, offers unprecedented levels of insight and opportunities in areas including:
The growing number of high-tech devices connected to the cloud—including wearables and automobiles—are giving insurers a wealth of new information to explore. Auto insurers, for example, can combine cloud analytics with mobile apps and devices to track driving habits and patterns, gain access to drivers’ risk profiles and use this information to incentivize them to change their driving behavior.
Cloud-based infrastructure is changing the way insurers do things; for example, it is likely to change how insurers consume and source IT and how they adapt and adjust to ever-changing rules and regulations.
The trend among insurers is to create a hybrid cloud environment which combines the advantages of private cloud with the versatility of public cloud. It helps carriers integrate their existing technology and to accelerate innovation, while taking advantage of mobility, social, big data and analytics. Many property and casualty (P&C) insurers prefer to use a hybrid cloud for core functions like product design and front office applications, including agent and broker portals.
Opportunities and benefits of moving to cloud
Opportunities are rife for insurers that are moving into the public cloud and benefiting from the advantages of an infrastructure as a service (IaaS) platform. These benefits include:
- Improving speed to market
Insurance-cloud-based computing solutions deliver greater IT agility and shorter project implementation time—helping insurers reduce the time it takes to get their new products and services to market.
- Accelerating business growth
With cloud-based insurance solutions, you can better listen to what your target audience is saying about your products and services. You can use cloud and data analytics to create more targeted campaigns and to support your upselling and cross-selling efforts. Cloud helps you to communicate better with your end customers, which creates a better claims experience.
- Expanding globally
We’re seeing signs of increased merger and acquisition (M&A) activity in insurance, and the move to cloud can make post-merger integration less difficult. Cloud solutions can help insurers expand their global footprint by fostering a high level of flexibility and standardization across geographies.
- Innovating effectively
Cloud solutions can help insurance CIOs quickly deploy and test new technologies to support business needs. They also help insurers to collaborate with their ecosystem of alliances and strategic vendors to develop new products and services.
- Reducing operating costs
Research shows that insurance firms are investing less in IT with an eye on cost efficiency. Cloud-based solutions can be less expensive than those deployed on in-house, back-end server systems and can reduce costs for licensing, hardware, and the maintenance of complex legacy systems.
Insurers are picking up the pace when it comes to cloud adoption—it’s fast becoming one of the core IT initiatives of the entire insurance industry and a way to improve the customer experience.
In my next post, I’ll talk about how you can start your journey to cloud. Until then, read our latest research on the Insurance Cloud in Europe.