How does the cloud feature in the transformation plan for your business?
If you are a business leader in your organization, perhaps the “cloud” and your cloud strategy has been something left to the IT professionals who are responsible for managing your IT infrastructure.
But as a business leader, you are responsible for setting the transformation agenda in your organization. Across the board, many (re)insurers take advantage of the opportunities presented by digitalization. From online sales and advanced analytics to the Internet of Things — transformation is inevitable. Your ability to compete and secure future wins depends on how well your organization capitalizes on “big data” to balance speed to market, customer delight, and technology costs. Without the cloud, there is no big data.
Why is the cloud now so important? Cast back five or so years and the benefits of cloud storage and computing were simply compared to in-house IT infrastructure. All these debates were firmly in the wheelhouse of your IT team and the debate ranged from whether cloud was more cost effective than in-house, or if it provided greater availability in regions where in-house infrastructure provision was lacking.
Three key trends have moved the cloud debate far away from a straight comparison with existing IT infrastructure, and into the strategic arena. Your cloud strategy is core to your business strategy.
First — big data itself has exploded. Insurance businesses know that the data they possess together with new sources are vital to produce better underwriting, customer insight, capital allocation etc. It has not been uncommon for insurance businesses to see the amount of data they possess increase by a thousand fold or more in the last ten years, as data sources become plentiful, more granular and real-time. The cloud manages this exponential rise in data storage, and processing power necessary to get the all-important insight from the data.
Second — purpose-built solutions have emerged that take full advantage of plentiful storage and processing power. The RMS(one)® platform on Microsoft Azure is a unified risk management platform built from the ground-up to work on the cloud.
Third — “cloud-first” applications, rather than on-premise, are designed to thrive in a cloud environment, automatically managing your data, leveraging big data processing performance, sharing insight with your team collaboratively, and synchronizing with other applications. All accessible anywhere using a web browser.
Thus, any worry about whether an insurer has enough storage or computer processing power, any notion that a business could not run an analysis because they have hit a limit, is now irrelevant. For example, on Microsoft Azure, there are over a million servers in 90 markets worldwide. If over 100,000 processing cores are needed to calculate the cost of providing life insurance for everyone on the planet (in two hours), it can be done.
The cloud has real business impact. During Hurricane Harvey, RMS clients benefiting from exposure management capabilities within the RMS(one) platform did not care if they had the data storage or compute capacity to run analytics, they could instantaneously visualize the Harvey flood layer along with their exposures. This level of insight took business agility to the next level, providing more clarity to the question “what does this mean for us” and to proactively plan how to support clients in their time of need.
Exposure management capabilities within the RMS(one) platform allowed users to visualize post-accumulation views of locations affected to the Harvey flood extent.
Implementation timescales for new applications has significantly reduced. As a result, the number of applications on platforms such as Microsoft Azure has increased dramatically. The cloud makes it simple to switch-on and roll-out applications when and where you need it, and typically pay on a usage basis.
Mission-critical Insurance Activities in the Cloud
With the explosion of big data, processing power, and growth in applications, increasingly “mission critical” activities are switched by the insurance industry into the cloud. But it also seems that this switch to the cloud comes at a time of heightened security, privacy, and compliance concerns.
Whether an insurance business manages all of its data and applications using in-house infrastructure or uses the cloud, the issues of security, data privacy, and compliance apply equally in both scenarios. These issues are the responsibility of each individual business — the question is how these issues are managed.
Look at what an in-house team would now have to contend with in terms of costs and time investments to build everything internally. Aside from the issues of managing ever-increasing data flows, and providing processing capacity, an in-house team has to tackle cyber threats — such as data heists regularly reaching millions if not billions of records, data privacy in terms of adhering to data protection laws specific for each region or country, and compliance with GDPR for Europe. Encryption, network security, certification, the list, goes on.
It is increasingly hard for in-house infrastructure to match what is delivered by a cloud platform such as RMS(one) running on Microsoft Azure. Although each individual business is responsible for their own security and compliance, a partner such as Microsoft has invested heavily into its infrastructure. With clear policies and principles when managing data. physical security, the location and build of data centers, to internal teams (red – attack, blue – defend) within Microsoft continually testing security, to compliance with every significant global, region or county-specific standard, the benchmark has been raised significantly by cloud providers.
Perhaps three years ago, it was acceptable for an insurance business to say “never” to the cloud. Two years ago, the benefits and transformational power of the cloud became clearer, with an acceptance to adopt the cloud at a future point. Now, insurance businesses are moving to cloud platforms like Microsoft Azure and exploring the capability of the cloud and risk management platforms such as RMS(one).
(Re)insurance leaders are well positioned to capitalize on what IDC calls, the innovation stage of the cloud where they worry less about infrastructure and focus more on customer innovations.
Where is your business on its cloud journey?
Click here for more information on the RMS(one) platform, and the approach to security and compliance.