According to a recent study conducted by Novarica, the number of insurance organizations using cloud computing as part of their technology architecture has tripled, growing from less than 20% just a few years ago to more than 70% today. And while the early adoption of cloud computing may have been slow pulling out of the starting gate, it is now more commonplace, becoming a necessary tool for property and casualty insurers looking to make real-time connections between people, services, devices, data, etc.
A simple definition of cloud computing is that it’s a delivery model used to help facilitate or accelerate business change and transformation. It works by increasing operational flexibility, allowing insurers to advance their technological capabilities and create a more adaptable and customer-centric business model for driving profitable growth.
The website Tech Target best defines cloud integration as a combination of tools, technologies, and practices that organizations can use to connect applications, systems, data, and even entire IT environments. Integration can happen between various cloud providers and platforms and cloud-hosted and local or on-premises resources. Today, there are many necessary business support functions fueling the integration of cloud computing services for property and casualty insurers. To date, the top drivers of cloud computing adoption include:
- Improving business agility for on-demand IT services, making it possible for insurers to make changes that include responding to new opportunities and emerging business solutions.
- Increasing speed to market by reducing the time to implement new IT applications and by quickly launching new products and services.
- Streamlining operational efficiencies by allowing insurers to make changes to core systems to improve underwriting, claims, and administrative processes.
- Improving customer centricity by using analytics to better understand customers’ buying behaviors and to align services and products.
As we move into the new year, we’ll begin to see more property and casualty insurers take to the cloud in order to take advantage of new and emerging technologies. The following are key cloud computing trends insurance CIOs will begin to see more of in 2019.
- An increase in hybrid cloud adoption. This type of hybrid cloud solution is a mix of on-premises, third-party, public, and private cloud services that allow workloads to move effortlessly from private to public clouds. The implementation of a hybrid cloud affords greater flexibility and data deployment options so insurers that are looking to adopt cloud-based business solutions can do so at their own pace, migrating to the cloud incrementally as their needs and budget change. It is predicted that by 2020, 22% of enterprise workloads will run on hybrid cloud platforms.
- A leap closer to quantum computing. Just a few short years ago, IBM introduced Q Experience, a quantum computer with the unrivaled ability to solve a host of complicated and complex technology issues at lightning speed. Today, quantum computers have far exceeded expectations by becoming the big kahuna of super computers, with abilities that include flawless data encryption and cutting-edge artificial intelligence predictions. It is predicted that in the near future, quantum computing will come to the cloud in full-throttle mode, providing the insurance industry with unparalleled opportunities to transform business models. Stay tuned.
- An increase in cloud security and compliance. Cybersecurity concerns have become part of a growing digital environment. In the coming year, new rules and regulations for data practices and cloud security will begin to intensify, ensuring organizations (and jurisdictions in which they do business or through which their cloud travels) remain in compliance with data security best practices. A very recent example would be the European Union’s General Data Protection Regulation, with other countries – including the U.S. – adopting similar laws
- Taking a native-cloud approach. A native-cloud application is a software application that is built specifically for cloud computing. These apps are designed, developed, and deployed in a way that allows insurers to maximize the functionality and services of the cloud by maintaining the cloud computing architecture. Currently, 47% of executives in the insurance sector surveyed already use a cloud-native approach as part of their overall cloud strategy.
By 2020, 83% of enterprise workloads will be in the cloud. Insurers who seek to leverage cloud computing capabilities will find themselves in a better position to successfully adapt – today and well into the future.
The digital world is moving at a fast-clip. Understanding future digital trends can be helpful when it comes to learning how they may impact your organization, and how to use them strategically in business planning.
Interested in learning more about insurance industry trends on deck for 2019? Check out our blog article, “12 Insurance Industry Trends.” And, if you have any questions about how One Inc can help modernize your operations through payments, let’s talk.