Due to the increased development of technology within the consumer world, insurance policies now require flexibility and speed to cover a wide variety of scenarios. While applying Amara’s Law to the relationship between tech trends and the insurance industry, it is unclear where the balance is between overestimating short-term impact and underestimating the long-term effect of emerging tech. Furthermore, implementing technology is proven to be costly when not carried out by experts. As of 2023, 63% of insurers are concerned about the adequacy of their technology capabilities and an additional 45% on the evolution of customer expectations.
Insurance industry impact
Although 42% of policyholders want single policy coverage irrespective of their transportation, only 21% of insurers feel they have these advanced partnership capabilities. This disparity is down to single policy coverage requiring embedded insurance models which raise concerns of disintermidation for carriers across the value chain. Enhanced technological capabilities such as cloud, provide effective risk mitigation and modelling by combining data with public datasets and predictive analytics for dynamic insurance pricing based on a wide range of data sources. As the increase of data variety has massive potential within the insurance industry, organisations need to ensure they have the correct environment to utilise and optimise it for better experiences.
Cloud environments allow organisations to create CI/CD pipelines to automate which can reduce claims journey by up to 30% across underwriting, claims, pricing and product design. Effectively implemented, cloud technology provides more secure environments for data through shared models of responsibility and significant automation capabilities. However, ineffectively implemented cloud migrations and utilisation can cause data loss, introduction of malware, failed audits, unnecessary project delays and expenses.
AXA Switzerland uses Google Cloud analytics to leverage their internal processes and produce innovative services for their policyholders. By improving their internal processes by automating labour-intensive and cumbersome tasks and creating better customer experiences by identifying their behaviour and desires, AXA Switzerland reduced their query and development times by 20% to 30%. GCP’s multi-cloud environment allowed them to adopt solutions such as BigQuery, Dataflow and Cloud Functions to gain cross-industry insights for predictive analytics on consumer behaviour and trends. Due to the flexible multi-cloud approach, AXA Switzerland developers can write a cloud-native application once, then run it on-premise, on other cloud platforms, with no infrastructure changes.
LV= uses Salesforce cloud to construct a Financial Services Cloud which captures every email message, live chat interaction and web form. They utilised this data to understand their customer needs on vehicle policy changes. The cloud automatically updates self-service capabilites on their website.
Due to LV’s cloud storage of individuals' brand affinity, customer journeys and preferences, the benefits extended to their marketing campaigns through automated and personalised customer journeys. They used multiple triggers and journeys to maintain relevance. As a result this increased their open and click through rates to 98% for their ‘trigger’ emails; welcome journey emails contributed to a 128% increase in sales and cross-selling renewal journey experienced a 500% uplift.
In 2023, insurance executives identified artificial intelligence/ machine learning and cloud technology as the most critical technologies required to succeed depsite their current capability immaturity due to their potential.
Cloud and other distributed infrastructure, such as wearable technology and telemetrics, are maturing rapidly and developing business cases within the insurance industry. Consequently, insurers now have the ability to develop a wider variety of services and products to encompass their policy-holders behaviours and desires. Thus, the cloud’s significant processing, analytical and storage capabilities have become essential for insurance organisations. The cloud’s large capacity for big data sets enables organisations to scale and adapt with an expansive range of data points such as:
By creating distributed infrastructure of combined applied AI and cloud technologies, it provides insurers with a robust engine to handle the core processing functions such as policy issuance, underwriting and claims adjucation. Alleviating this monotonous strain from developers provides insurers with competitive advantages to produce more innovative services based on the increasing wide range of data points.
Despite the high demand in 2023 and increased maturity, there is still a severe talent deficiency within cloud and edge computing skills. This is unlike applied AI which is verging on a talent surplus, see McKinsey’s report figure below.
WeShape is a cloud native consultancy who provide technical solutions, at pace, scale and demand. Our established position in the cloud community as official AWS advanced and GCP partners, exemplifies our dedication and specialist expertise in cloud computing. We are committed to helping organisations reduce their cloud confusion and optimise their current solutions.
We are dedicated to the cloud industry as demonstrated by our variety of events within the technology industry:
Read more of our recent insights, ideas and points of view, curated by our expert network: