For Insurers, Cloud is the Best Path to Digital
Many insurers recognize the move to digital will potentially deliver increased competitiveness and customer engagement. The question is, how does an organization start this journey?
The best answer is to embrace the cloud. That's the upshot of a recent Accenture report, "The Cloud as Rainmaker," focused on the insurance industry.
The good news is this path will not be as tenuous as thought, or as difficult as previous application and system migrations. Those are the conclusions drawn by Alex Ratkovsky and Matthew Taylor, both with Accenture. “Without cloud’s capacity and firepower, digital does not happen,” they observe. “Nor does an 80 percent cost savings.”
The challenge is things need to move faster in this traditional conservative industry, they state. “Slow, incremental progress has been the norm in an industry that eschewed sudden change due its justifiable focus on limiting the risk of that change. Until recently.”
Ratkovsky and Taylor make three recommendations for insurers to benefit from the potential of cloud as they move to digital.
Recognize that digital transformation needs cloud. “Cloud makes digital happen,” say Ratkovsky and Taylor. “Blockchain, biotech and connected devices have significant ramifications for the insurance industry, and positive ramifications for companies that use them proactively to improve client service, speed to market, and margins.” Measure progress. “Almost every company creates a business case for cloud,” they relate. “What many insurers fail to do is validate that they have achieved it.
Track value realization. Obsess over leading metrics such as the ratio of cloud to legacy applications, claim response times and the number of resource hours saved. Identify impactful trends, and correct your course as needed. Beyond cost savings, quantify the return on agility reaped. Measuring the additional revenue achieved through faster rollout of new cloud-enabled capabilities – digital usage-based policy features, for example – is key to understanding the total value driven by cloud.”
Recognize that “lift and shift” works. It’s possible to efficiently begin moving assets to the cloud realm. Ratkovsky and Taylor explain that they “have helped companies realize 80 percent savings using the lift-and-shift approach to cloud application migration.” The client firm “leveraged an orchestration layer that automated complex provisioning and operations workflows, and implemented an auto-scalable public cloud solution capable of adjusting to usage peaks and valleys.” In addition, they point out, “sunk costs are recoverable.”