Life Insurers Look Long Term for Cloud Strategy
This week I attended the 2016 Life Insurance Conference, jointly hosted by LIMRA, LOMA, SOA and ACLI. The focus of the conference was “Looking Long Term”, with sessions ranging from e-delivery for distribution, predictive analytics and other operational-focused areas to transformation, innovation and future capabilities, including a session I presented on “The Forecast is Clear: More Cloud in The Future”.
The opening keynote speakers were Jim Morris, CEO Pacific Life, and Josh Linkner, a best-selling author on innovation. Both presented thoughts on how the life and annuities business is looking to the future.
In Morris’ keynote he discussed how Pacific LIfe has taken a look at their future customers and developed principals for success, including speed/focus, relationships, flexibility and alignment. For example, they have initiatives now for simplifying processes and their products. I noted that absent from the strategy is “use cool new technology” – their focus is on better customer experience.
Linkner gave five steps to what he called “everyday innovation”. Actually he called the five steps “five obsessions of innovators”, which included “Get Curious” and “Get Scrappy”. One of his key points was that to be innovative, an organization needs to encourage creativity, which often leads to disruptive ideas.
My session on cloud computing was well attended – life insurers and vendors alike are interested in the adoption of cloud-based delivery in the industry. After describing where SaaS, IaaS and PaaS solutions fit into the array of options for external delivery of IT services, I presented information from Novarica’s recent survey of digital, mobile and cloud capabilities and their use at insurance carriers. Adoption of SaaS for core systems is just starting at Life carriers, but as our survey showed, many large and some midsize carriers are using SaaS-based non-core solutions. These carriers noted that speed of delivery and the ability to provide unique capabilities were the key drivers for implementing in the cloud, and focused on security, performance and pricing when considering specific vendors. Insurers are generally finding value in cloud deployment, but still face challenges with lack of predictability in pricing and with upgrades. Most notably, few are considering any formal ROI or metrics for these efforts, which is an issue for most IT transformation projects across the industry.
Overall our survey found that cloud and SaaS solution adoption is growing at life insurers, with most large insurers and a growing number of midsize insurers planning to grow, enhance or maintain current capabilities. The forecast is clear – there will be more cloud in the future for life insurers.
If you are interested in getting a copy of my slides and in discussing them further, please contact me at firstname.lastname@example.org.