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The Actuary The magazine of the Institute & Faculty of Actuaries

Insurers rapidly moving to the cloud

More than half of insurance companies are developing new IT operating models to support cloud technology, a global survey by consultancy firm Accenture has uncovered.

Insurers expect cost savings from cloud technology ©Shutterstock
Insurers expect cost savings from cloud technology ©Shutterstock

The findings show that 56% of insurers are preparing to transition to the cloud, with cost savings the top benefit expected, followed by greater visibility and control of IT usage.

However, the research found that insurance firms have been slow in migrating core applications to the cloud, despite the considerable advantages.

Accenture said platform transition in key areas such as claims management is “rare”, and that only a few insurers have completed work on major cloud applications.

“Insurers should identify what legacy applications can have the most immediate impact as cloud-based,” said Accenture’s head of technology advisory practice, Andrew Poppleton.

“Carriers can take a cloud-enabled approach to migrate key applications, working closely with vendors while maintaining the effectiveness of their core systems throughout the journey.”

The survey found that the top three areas that insurers have identified to migrate to the cloud early are databases, analytics and business intelligence, and the company website.

Data backup and disaster recovery are two infrastructure-related functions that were often mentioned as having already been moved to the cloud.

However, the survey also found that only half of insurers rate employees’ skills related to their cloud strategy as “mature”.

And just a third of the respondents said their current policies on cloud-related security are “mature”, although 58% have completed a planning process for cloud security.

“Beyond cost savings, the cloud can help create a differentiated customer-experience, improve claims efficiency, and allow for better use of data, Accenture’s European insurance practice lead, Daniele Presutti, said.

“It’s encouraging that insurers are taking thoughtful steps to develop an effective cloud strategy. Now they need to accelerate those efforts and make transitioning their core platforms a priority.”

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