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Insurers aim to extend their cloud journey to the front-office

Insurers extend their cloud journey to the front-office

After initial success with back-office cloud enablement, insurers must push their cloud journey into the front-office to achieve the bigger benefits.


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Insurers have been fairly quick to recognise the benefits of cloud enablement in the back office. And adoption was fairly straightforward: back-office processes were clear and well-defined; the platform providers and enterprise resource planning (ERP) vendors were encouraging; and the risks were comparatively low.

Yet, progress towards full cloud enablement seems to have stalled at the back door. Insurers seem quite comfortable moving their own data into the cloud, but they have been much less aggressive with their customer and policy data and business processes. And that means they are not yet realising the true benefits that enterprise cloud adoption can deliver.

Insurers delay front-office cloud programs

There are many reasons that activity may have stalled. Part of the problem relates to the external environment. Most of the policy platform vendors have been very slow to shift their services to the cloud, preferring to stick to the traditional on-premises models.

Insurers are also conscious of increasing regulatory inspection and are concerned that greater cloud enablement might influence their risk profile. Concerns about customer and policy data being hacked are high.

Complexity is another major issue since few have a good grasp of their current technology estate and capabilities and they will need to do some heavy lifting to rationalise their assets before they can think about moving more aggressively into the cloud.

But the bigger problem comes down to cost and benefit. It will take a lot of work and resources to move all of the front-office processes into the cloud, and It is hard to prove the specific ROI – to support their budget requests.

This is unfortunate, since the benefits that greater cloud adoption could deliver go beyond the obvious cost take-out that comes from outsourcing key processes. The most valuable element they would realise from cloud is the improved flexibility and agility. For an industry which must be increasingly customer centric, cloud adoption is a key foundation to enable this.

Getting the cloud journey back on track

Through KPMG member firms' work with a wide range of insurers around the world and across sectors, we have uncovered six tips to help get their cloud journey on track.

  1. Drive the business to lead: Cloud enablement is not an IT issue. It is a business opportunity. The most successful organisations start by understanding what they want to enable (for their agents, their customers or their organisation) and how technology can help them achieve their goals.
  2. Assess and manage the risks: The shift to cloud enablement is not without risks. That is why the most successful insurers fully assess the potential risks – and interdependencies – before creating their roadmaps or making fundamental changes.
  3. Consider the organisational change requirements: The shift to cloud adoption in the front-office should unlock valuable new models, ways of working and innovation. Beyond change management initiatives, insurance executives should think about how cloud enablement might allow them to achieve new levels of productivity and how that might drive future growth.
  4. Aim for flexibility and agility: The idea behind cloud enablement should be to deliver increased flexibly and agility to the business, supporting continuous change and improvement. This requires organisations to rethink their own internal approach to opportunity identification, process modification and ultimately change adoption.
  5. Start small and work up: Rather than trying to build a complete and end-to-end roadmap that spans multiple years and technology horizons, executives may consider starting with smaller initiatives before moving on to the more fundamental and transformative changes that must be undertaken.
  6. Start now: The challenge is to ensure that your roadmap is realistic and achievable; that you have the right capabilities and capacity to achieve your goals; and that you have the right measurements and milestones to deliver value.

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