The cloud journey for each insurer is different, but the need to migrate is almost universal. How and when will Canadian insurers grow in the cloud? Here are three key signals.
With the disruption of COVID-19, there is a unique opportunity for the industry to rethink insurance in the cloud. We continue important, often critical, digital transformation conversations. I believe that this "transformation" increases the number of contact points with customers and the overall relevance of the insurance offering – which makes it more personal, more real-time and more holistic.
It can be difficult for insurance companies to know where to start the cloud journey. As my colleague Darcy Dague points out, "The majority realize that they need to adopt cloud technology to keep pace with their competitors and with customers' wishes and needs," but important obstacles "have been difficulties in migrating older systems combined with concerns about integrity and security.
Many Canadian insurance companies are still lagging behind with cloud adoption, but that does not mean they have not started the journey. Cloud is no longer a differentiator, it is table games, the minimum required to remain competitive. The differentiator now is the adoption rate.
In this ongoing cloud conversation, I ask: When and how should insurance companies go big in the cloud? This is a time to inform your cloud strategy and shift the 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 that the cloud can lead.
Three signals indicating that it's time to speed up cloud computing
For insurers who have already used the cloud in limited capacity, how do they know when it's time to go all-in? Let's take a look.
1. Cyber threats and security breaches
There are no minor security breaches. Every attack can erode trust and threaten customer retention. Today we understand that there is a risk in continuing to use traditional systems. We see this pressure pushing and pulling insurance companies to the cloud in a hurry.
For example, in 2019, a North American life insurance company 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 features, including data segregation, could have helped prevent this intrusion.
2. Disruption and innovation play
"Going big" can mean that you get the main benefit of new income 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 range of financial products and services including banking, investment, healthcare and lifestyle related services. In 2018, over 33% of the new retail customers came from these ecosystems, while operating profit 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 achieves personalized health care for patients. Doctor Home upgraded major services including access to private doctors or a team of doctors along with guaranteed insurance. This last part guarantees a strong protection of the insurance system.
In addition to this, in the real estate and non-life insurance arena, Ping An's credit-based Smart Auto Insurance Claim Solution was the first system to enable drivers to make claims through their mobile phones. . Some traditional claims may take 10.59 days, but the average lifespan of this solution is only 188 seconds.
3. Customers and capital in digital distribution
"Going big" with customized innovations made possible by the cloud, especially those that focus on product distribution, can attract investors' attention. Although this is less common in the Canadian market, insurance companies should start making innovative investments in the cloud and communicate them to help with relevance and growth.
Allianz is an inspiration to the Canadian market in embracing digital disruption by "leveraging the power of technology to return to business models, serve customers through new channels and create important user experiences." They have streamlined their products to deliver policies. digital, which accounts for 25% of new business, and retrained its agents to leverage digital tools.This customized innovation drives attention, interest, and results. Read more in our latest report: Reimagining insurance: The new cloud imperative.