The cloud journey for every insurer is different, but the need to migrate is near-universal. How and when should Canadian insurers go big in the cloud? Here are three key signals.
With the disruptions of COVID-19, there’s a unique opportunity for the industry to reimagine insurance in the cloud. We’re continuing important, often critical, digital transformation conversations. I believe this “reimagining” expands the number of touchpoints with customers and the overall relevance of the insurance offering – making it more personalized, more real-time and more holistic.
It can be difficult for insurers to know where to start on the cloud journey. As my colleague, Darcy Dague, points out, “The majority realize they must adopt cloud technology to keep pace with their competitors and with customers’ wants and needs”, but key barriers “have been difficulties in migrating legacy systems combined with concerns over privacy and security.”
Many Canadian insurers are still behind in cloud adoption, but that doesn’t mean they haven’t begun the journey. Cloud is no longer a differentiator, it’s table stakes, the barest minimum required to remain competitive. The differentiator now is the speed of adoption.
In this ongoing cloud conversation, I’m asking: When and how should insurers go big in the cloud? This is a time to inform your cloud strategy and shift focus to Artificial Intelligence and data as the heart of your decision-making. It’s time to understand the experience you want to deliver so the cloud can lead.
Three signals that indicate it’s time to speed up cloud adoption
For those insurers that have already adopted the cloud in a limited capacity, how will they know when it’s time to go all-in? Let’s take a look.
- Cyber threats and security breaches
There are no minor security breaches. Any attack can erode trust and threaten customer retention. Today we understand that continuing to use traditional systems is a risk. We see this pressure pushing and pulling insurers to the cloud with urgency.
For example, in 2019, a North American life insurer experienced a major data breach when files were compromised due to shared directories. The traditional system did not protect against this loophole. A cloud strategy in this circumstance, with its built-in capabilities, including data segregation, could have helped prevent this breach.
- Disruption and innovation plays
‘Going big’ can mean gaining the first-mover advantage on emerging revenue opportunities. Insurers can work with ecosystem partners to create real-time experiences for customers. The cloud keeps data flowing smoothly with these partners.
For example, Ping An, a silver award winner in the Customer Experience category at the Efma-Accenture Innovation in Insurance Awards, continues to lead with innovation. They created ecosystems of partners to expand beyond insurance and provide customers with a full spectrum of financial products and services including banking, investment, healthcare and lifestyle-related services. In 2018, over 33% of new retail customers came from these ecosystems, while operating profits and customers increased by 18%.
Ping An’s innovative Private Doctors product was enhanced with Ping An Doctor Home. This is an ecosystem of health services that achieve personalized health management for patients. Doctor Home upgraded major services including access to private doctors or a team of doctors along with guaranteed insurance. This last piece ensures strong insurance system protection.
Further to this, in the property and casualty insurance arena, Ping An’s Credit-Based Smart Auto Insurance Claim Solution was the first system to give drivers the ability to make claims through their mobile phones. Some traditional claims could take 10.59 days, but this solution’s settlement time averages a mere 188 seconds.
- Customers and capital found in digital distribution
‘Going big’ with customer-facing innovations enabled by the cloud, especially those focused on product distribution, can attract the attention of investors. While this is less prevalent in the Canadian market, insurers should start making innovative investments in the cloud and communicating those to help with relevancy and growth.
Allianz is an inspiration for the Canadian market as they embrace digital disruption by “capitalizing on the power of technology to revisit business models, serve customers through new channels and create essential user experiences.” They have streamlined their products to deliver policies digitally, which account for 25% of new business, and reskilled their agents to leverage digital tools. This customer-facing innovation drives attention, interest and results.
At Accenture, we strongly believe this is the time to undertake a review of your architecture and prioritize the value to be extracted from the improved customer experience through the cloud. We encourage you to continue to think about where you should place investments and where you can leverage the expertise of ecosystem partners. Focus on building in-house capabilities that are true competitive differentiators, such as experience design and analytics, while recognizing when to bring in the hyperscale cloud providers.
Looking to other markets, we know it can be done. There’s no need for Canadian insurers to re-invent the wheel. But it is time to ‘go big’.
If you’d like to discuss your cloud journey, please connect with me.
To learn more, read Accenture’s report: Reimagining insurance: the new cloud imperative report.
By Paulo Salomao
This article originally appeared at https://insuranceblog.accenture.com/three-signals-for-canadian-insurers-to-go-big-in-the-cloud and is republished with permission.