Cloud security includes everything security teams are responsible for today but translated into the cloud environment – considering the shared responsibility model. Are insurers ready?
For life and non-life insurers, digitalization of sales and distribution is just one of the key trends transforming the industry. In their relentless pursuit of growth, insurers are exploring new business models, new products and services and new ways to deliver value to customers. We believe customer insights, seamless experiences and digital tools are keys to success. So it’s no surprise that many insurers are also looking to cloud technology to enable digital transformation and faster development of new digital products.
Juggling trends and disruption
Insurance companies are confronted with various challenges today. The 2020 edition of the annual EY Global Insurance Outlooks previews various key issues shaping the industry in the near term. The study highlighted the unique challenge of European insurers to stimulate growth and drive innovation in the face of a near-recessionary economic environment. At the time of publication, the impact of COVID-19 had not been factored in and it remains difficult to predict the full reach of the impact.
We will see competition intensifying alongside closer regulatory scrutiny – two trends that will add further complexity to the industry within the next few years. In order to face these challenges and be better positioned on the market, agility and speed in response to new client needs (speed to market) is essential. Insurers seeking to win in the market with competitive advantages will need to think about emerging technologies such as artificial intelligence (AI), machine learning, robotics and cloud computing. Cloud-based infrastructures will allow insurers to use attractive IT-cost models, move from CAPEX to OPEX and apply pay-as-you use services. The result is better flexibility, allowing, for instance, new features and functionality to be tested much faster than in the past while only paying for resources used during testing.
Balancing present needs and future opportunities is also challenging. But there is considerable upside for those insurers that can undertake successful digital transformation programs and seize the opportunities offered by the cloud. Of course, as they transition to the cloud and offer more digitally oriented portfolios and services, insurers must strengthen their cyber security frameworks and keep protecting what matters most. Some are hindered by core legacy systems that remain in place and can prevent insurers from adopting new technology, including launching apps or moving to the cloud.
According to EY’s cloud adoption survey, cloud is the most transformative technology available to financial services organizations. Its top benefits? Speed to market followed by cost optimization and scalability. Moving to public cloud securely and under strict regulatory supervision requires experience and expertise. Organizations need a partner to define what “good looks like” in a cloud-native environment.