New SMA Blog by Karen Furtado, Partner, Strategy Meets Action
Boston, MA (May 22, 2018) – Eight years ago, I was giving a talk on cloud at a conference. The first thing I had to do was explain what the cloud is. It’s a new world, isn’t it? Cloud is no longer for the digital giants, the InsurTechs, and the early adopters. Today, it would be difficult to go through a whole day without using cloud computing.
Insurers’ core systems (policy, billing, and claims) are no exception. Cloud-hosted core systems are no longer a niche item: 59% of the new P&C core systems that insurers purchased in 2017 will be deployed in the cloud. On-premise deployment is by no means obsolete, but more and more, it will be only a fraction of insurers’ technical environments.
Increased speed to market, fast implementations, seamless scalability, easy access to new technologies, robust safety standards, and, in some cases, streamlined software upgrades have all attracted insurers to core in the cloud. What comes next, however, is where the real opportunity lies.
The digital world is all about making connections – between people, technologies, services, data and data sources, etc. – and doing so at top speed. Whether your core systems are in the cloud, hosted by a solution provider, or run from your own server room, you have to be able to call out to external services for data and transactions.
New computing trends are pushing the abilities of core systems even further. Cutting-edge artificial intelligence services (think “rent-an-AI”) are only available through the cloud. For example, if you wanted to incorporate advanced natural language processing into your core systems, you would not simply install IBM Watson on your existing servers. Microservices, which are isolated processes that can be plugged into an existing technical architecture, fulfill their true potential by calling out to advanced, external services like blockchain and IoT data platforms.
Then there are the possibilities offered by computing in the cloud. Serverless computing allows insurers to leave all server management and resource provisioning to the cloud provider for increased processing power, decreased latency, and real-sized costs. It represents an evolution in the way that we consume and use cloud. For insurers looking at huge new sources of data, like wearable devices, serverless computing is a must.
These are the real benefits of cloud computing. Core systems in the cloud can take advantage of some of these new computing trends more easily, but all have an opportunity to leverage the cloud to advance their technological capabilities.
The insurance industry is poised to utilize cloud in a whole new way by streamlining processes and upgrades, connecting to advanced technology, and consuming more data. The more benefits insurers reap from cloud computing, the more cloud computing will become table stakes.
To learn more about the latest computing trends and how they will affect insurers’ core systems, please see our recent report, The New World of Core Systems: How New Computing Trends Will Transform the Core Systems Paradigm.
About the Author
Karen Furtado, a Partner at Strategy Meets Action, is a well-known authority on insurance technology and how it fuels transformation within insurance companies. Her focus is helping insurers prepare for the future of the industry through the decisions they make today. Karen’s deep understanding of how to effect change guides insurers in the development and implementation of their transformation roadmaps. Her comprehensive knowledge stretches across core systems, the implications of InsurTech, and enhancing adaptability and flexibility in a changing market. Her commitment to promoting innovation, encouraging the exploration and adoption of new technologies, and developing proactive ways to plan for the future draws those seeking an edge. In a highly competitive world, Karen brings exceptional knowledge and experience to the challenges of connecting solutions to business and IT requirements.
During her career in the insurance industry, Karen has leveraged her business and technical experience to enable insurers to meet a wide variety of challenges. Many insurers have benefited from her advice that spans a broad field of expertise including enterprise application strategies and implementations, the influence of a rapidly changing business and technology landscape, and outsourcing services.
Karen’s opinions on insurance, technology, and transformation are highly regarded and often sought after by the press. She contributes to a number of insurance trade journals and is also a frequent keynote speaker at major industry conferences.
Exclusively serving the insurance industry, Strategy Meets Action (SMA) is an advisory services firm offering retainers, research, consulting, events, and innovation offerings to both insurance companies and solution providers. Learn more about SMA at www.strategymeetsaction.com.
SOURCE: Strategy Meets Action (SMA)Tags: Artificial Intelligence (AI), Cloud, core systems, natural language processing (NLP), Strategy Meets Action (SMA), Watson