Time to move your business into the cloud? Here are 5 principles to guide your journey

In my previous post I explained why leading insurers are moving to cloud, and the opportunities that await you once you get there. In this post, I’ll explore how you can start your journey, how you can use technology to drive a new business model, and five principles to guide you along the way.

The journey to cloud begins

Every exploration starts with a map, and for most insurers, the journey to cloud begins with the development of a blueprint for their business model. The model may be a combination of:

  • A new infrastructure model, based on a shared pool of resources that can be rapidly configured, provisioned and released.
  • A new architecture model, for new levels of agility, flexibility and security.
  • A new application model, to provide completely managed end-to-end business solutions with low configuration and scalability.

How to use technology to drive a new business model

The table below illustrates how insurers can use technology to drive these business models, and the benefits of each:

Business model 

Benefits 

Technology enabling this business model 

New infrastructure model 
  • Fixed-cost reduction 
  • More control over operations and infrastructure service levels 
  • Faster and more efficient distributed infrastructure provisioning 
  • Server / network / storage automated provisioning 
  • Non-disruptive and fast approach with minimal application transformation  
New architecture model 
  • Evolve from monolithic, complex apps to flexible and scalable services 
  • Increase speed and reliability of services development and positioning 
  • Highest level of security and compliance 
  • Decoupled architectures and APIs 
  • Microservices execution and architectures 
  • Mainframe to microservices 
  • Big data architectures 
  • Lightweight front-end architectures 
  • DevOps models 
New application model 
  • Standard and highly scalable solutions that can be provided with low configuration 
  • Seamless introduction of state-of-the-art features and applications 
  • Abstraction of technological complexity 
  • Vendors’ portfolio of aaS solutions for: 
  • Core insurance HR 
  • ERP 
  • CRM 
  • Project portfolio management 
  • Mail and collaboration 

Five core guiding principles

The journey will be different for each insurer; however, the following five guiding principles will always apply:

  1. Transition non-core services to cloud

Insurers can use BPaaS (business platform as a service) to do non-core services—for example human resources, procurement, trade settlement and accounting—at a lower cost and with higher quality.

  1. Increase SaaS coverage

By using software as a service, insurers can reduce software development and maintenance costs.

  1. Assess and migrate other applications to IaaS / PaaS

Carriers can use standardized IaaS and PaaS (platform as a service) platforms to reduce support costs for custom codes that provide a real competitive advantage.

  1. Reduce use of custom code

Insurers should quantify and measure their progress towards the reduction of custom code in the organization, moving to alternative platforms for better quality and a lower cost to maintain.

  1. Reduce vendor count but maintain competition

A well-designed provider ecosystem can help reduce operational complexity while maintaining pressure on pricing through competition.

In my next post, I’ll talk about effective cloud management and the steps to a smooth transition. Until then, read our latest research on the Insurance Cloud in Europe.

To continue the cloud conversation, contact me here.

Submit a Comment

Your email address will not be published. Required fields are marked *