Insurance Blog | Accenture    

Although migrating to the cloud is a must for most APAC insurers, that doesn’t mean it’s easy. Central to the process is understanding the barriers that stand in the way of a smooth cloud journey (many of which differ from barriers experienced by US and Europe-based peers) and creating a strategy to overcome them.

While many of these barriers apply to composite insurers in APAC, the truth is that they’re more of a challenge for life insurers and those that provide complex P&C lines. Insurers with simpler P&C books or with less complex operations typically find these barriers easier to deal with.

Dismantling the barriers

Click/tap to read the full report.

My white paper outlined some of the key barriers facing APAC insurers, and noted that they are of particular concern for regional players that operate in multiple markets. (For the purposes of this blog, I’ll deal with Japan-headquartered insurers separately.)

This cross-market approach is the reason I regard data residency as the key barrier – because many APAC countries have bespoke regulations on the storage and/or processing of client data. Balancing these regulatory variations makes a centralised migration to the cloud trickier for APAC-based insurers than for their peers in, say, the US.

This data residency challenge also ties to another aspect that my white paper examined: whether insurers are better-off choosing a single-cloud provider or a multi-cloud provider. The reason APAC insurers often consider a multi-cloud approach is because they need to factor in differences in data-related regulations; in many cases hyper-scalers simply aren’t yet present in every market.

Legacy infrastructure

Other key barriers facing APAC insurers include business-IT alignment, regulatory and compliance factors, the complexity of applications, and skills-gaps. Of greater importance to many is the legacy barrier, by which I mean the backend policy administration systems – those applications that sit on outdated infrastructure, and which many APAC insurers still operate.

Such infrastructure is increasingly costly, difficult to maintain and makes it hard to launch products to market quickly. It also slows responsiveness, undermines efficiency, and detracts from the ability to leverage cross-market opportunities. (Digitally decoupling from legacy systems is a challenge faced by many US and European counterparts, too; this Accenture blog provides a useful guide on key steps.)

One of the difficulties of dealing with legacy life systems is that they often hold books of business going back decades. Another is that they’ve been tailored to operate in APAC’s multi-market region and to the regulatory needs of those markets. All of this adds to the challenge of migrating to the cloud – particularly for insurers with a regional footprint and for those with complex legacy policies, which are often written on green-screen COBOL and held on AS400 or mainframe platforms.

The good news for APAC insurers is that cloud solutions can resolve the challenges of dealing with legacy infrastructure. In this way, insurers can deploy cloud-native solutions as they slowly decouple and start to migrate and modernise. Even though full resolution of legacy infrastructure is a long-term project, short-term solutions are available in APAC.

One such example is provided by Skytap, which offers a shorter-term lift-and-shift migration option to Microsoft Azure. In this way, an insurer looking to exit its private data centre can do so while it considers a longer-term project to modernise its backend platform.

Japan and barriers

I mentioned Japan earlier, and said the situation for insurers headquartered there differs in some respects from their APAC peers.

Among the factors specific to Japan are that: its market is highly developed; the interest rate environment is different to many APAC nations; and there are well-known labour and specific regulatory challenges.

In addition, Japan-headquartered insurers typically have massive legacy books of business. That makes it harder for cloud-focused executives to easily justify the business case for the journey to the cloud.

In my view, these complexities explain why many of Japan’s large, domiciled players have been more conservative in their move to the cloud.

Reach for the cloud

As I’m out of time, I’ll close by saying that readers interested in understanding why we believe moving to the cloud is an imperative can read more about that here.[1]

Additionally, this report shows why doing so is a transformation play that sees insurers leverage the ecosystem of the cloud while bringing scalability and efficiency, and ensures they can enjoy the benefits of resilient and adaptable systems.[2]

In short, migrating to the cloud can help APAC insurers address many of their existing challenges, with several short-term lift-and-shift options available for those looking to get their journey underway.

In my next blog, I’ll look at the triggers that motivate clients to move to the cloud, and show how insurers can move from one trigger, or archetype, to the next as they create a smooth cloud journey.

To download a copy of The Cloud Imperative for Insurance report – Silver linings: Cloud Migration for APAC Insurers click here.

Get the latest insurance industry insights, news, and research delivered straight to your inbox.

Disclaimer: This content is provided for general information purposes and is not intended to be used in place of consultation with our professional advisors.

[1] The Cloud Imperative for Insurance, Accenture (2020). See:
[2] Cloud Ascent: Cloud is the urgent business imperative: how to maximize its value, Accenture (2020). See: