Let enterprise – not expertise – set your cloud agenda
Carriers can increase their revenue growth if they compare their current and future business needs with the offerings of cloud providers.
Insurance companies can greatly improve the benefits of cloud computing by aligning their business needs with the products and services of large cloud providers. In addition to accelerating the migration of critical applications and workloads to cloud services, choosing the right provider with the right cloud solutions and tools can help grow your business and increase revenue.
Too often insurers keep an eye on their current technology when they travel to the cloud. They want to make sure they can migrate critical applications and systems to their cloud providers. That makes sense. It is important that this transition goes smoothly.
However, it is important that insurers also consider their future business needs.
By determining how their businesses are likely to change and understanding the technologies they need to support new business initiatives, insurers can build relationships with the cloud service providers that best meet their evolving needs.
We found that the most successful cloud projects are collaboration between organizations that are changing to meet the demands of the future and technology providers that want to make change easier. For example, AXA is working with both Amazon and Microsoft to move many of its core data resources to the cloud and develop new business applications. Deutsche Bank recently announced a partnership with Google that will allow it to migrate its IT services to the cloud while working with the digital services provider to develop a range of innovative financial products.
Outside the financial services industry, the Renault-Nissan-Mitsubishi alliance uses Microsoft’s Azure cloud platform to deliver a variety of digital services to connected vehicles in nearly 200 markets worldwide. Renault has also announced plans to use Google’s cloud services. The automaker intends to migrate the IT activities that support its manufacturing facilities and supply chain management to Google Cloud. Renault will leverage Google’s cloud-based data analytics, machine learning and artificial intelligence offerings to improve the efficiency of its operations and enhance its industrial data management platform.
Some technologies are critical to insurers, but little additional revenue can be generated for cloud providers.
What should insurers consider when choosing a cloud provider? The selection of the products and services offered and their pricing can sharpen their focus.
Our cloud use case landscape matrix for the insurance industry shows the value of the most important digital technologies for both insurers and cloud service providers. The perspectives of users and service providers are often very different. Intelligent process automation, for example, is an increasingly important technology for insurers, but a lower priority for cloud service providers. This is because it doesn’t use a lot of computing power. Similarly, technologies that came to the fore during the COVID-19 pandemic, such as digital workstation systems, chatbot and voicebot solutions, and customer experience offerings, have been critical for insurers but do not generate high revenue for cloud providers. In contrast, data lakes and data warehouse applications are the ideal place for both insurers and cloud companies.
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This value alignment matrix is a broad guide. It maps the current and expected needs of insurers against the average cloud consumption requirements of users of the cloud services from Microsoft, Amazon, Alibaba and Google (MAAG). Each of these cloud service providers has a wide range of products. The features and prices of offerings such as Platform-as-a-Service (PaaS) and Infrastructure-as-a-Service (IaaS) can vary significantly. Insurers should take a close look at the products and services of each major cloud provider and align with the companies that best serve them now and in the future.
Migrate, Accelerate, Grow – while businesses progress on typical cloud journeys, business value can be increased if defined and actively pursued.
Business benefits are often overshadowed by the search for cost savings.
A business-centric cloud agenda is a big change from the way insurers have viewed the cloud in the past. Cost savings as I mentioned in my previous blog post [Link]are the most common motivation for insurers to move to the cloud. Next up is better control and management of technology resources. Business benefits such as greater flexibility or the ability to scale new services or applications are much lower.
For a business-centric agenda, insurers need to manage three key steps as they move further into the cloud.
- Hike: By migrating infrastructure and software to the cloud, IT operating costs and “technology debt” caused by inefficient legacy systems are reduced, and users can be scaled as needed.
- Accelerate: By building a robust cloud infrastructure, insurers can accelerate technological improvements and accelerate business efficiency improvements. The quick benefits include improvements to the service center, less administrative rework and less IT downtime.
- Innovate and grow: With platform solutions, insurers can accelerate business improvements and improve risk management. Various proven solutions are available for applications such as claims handling, product distribution and business development and are constantly updated.
Technology improvements and cost control are important parts of any cloud agenda. However, you should never overshadow the business benefits of cloud migration.
In my next blog post I will discuss how insurers can use their cloud services to increase the effectiveness of their digital ecosystems. Until then, check out the links below. I am sure you will find it useful.
The cloud imperative for insurance (PDF)
Considerations for an Effective Cloud Strategy (blog post)
Cloud services and solutions
Cloud migration services and strategy
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