Other parts of this series:
For “success” in the rapidly transforming digital world, a critical element is cloud. However many insurers are still hesitant to adopt this technology for three main reasons.
According to a 2016 Accenture survey, here are the three most common myths insurers believe about cloud:1
Myth #1: Digital transformation can happen without cloud. Many insurers believe they can change the way they do business and transform digitally, without adopting cloud.
Myth #2: Sunk costs are unrecoverable. Thirty-five percent of insurers surveyed claim that unfavorable total cost of ownership is holding back their cloud adoption.
Myth # 3: Lift-and-shift doesn’t work. Our survey revealed that more than half of insurance executives cite current technology processes as impeding growth, but many think incremental change can help fix this.
Let’s take a closer look at the first myth. Insurers believe they can go digital without embracing cloud.
As insurers witness the massive transformation of their industry with connected cars, homes and wearables, fintech startups are entering the market in droves, armed with the cloud. Our research shows these new entrants are leveraging this technology so successfully that 82 percent of insurance executives believe that these competitors are indeed disrupting the industry.2
These new players are using blockchain, biotech and connected devices proactively to improve customer service, speed to market, and margins, while some traditional insurers continue to believe that digital success can happen without the cloud.
But without cloud’s flexibility, reliability and security, the insurance industry cannot fully leverage new applications that hold promise for revenue growth and cost savings. The one-size-fits-all analytics model is now dwarfed by the cloud’s firepower.
Accenture’s survey shows 83 percent of insurance executives agree that cloud will foster innovation that was not previously possible.3 Yet, only less than half of insurers (49 percent) are investing in a comprehensive digital technology program as part of their overall business strategy.
To compete, traditional insurers should put their money where their mouths are and understand digital transformation cannot happen without the cloud, a most powerful business asset. The cloud makes digital happen.
In the next part of this series, we debunk the other two common myths about the cloud.
To learn more, register to download the report: Cloud as Rainmaker
- Accenture 2016 Technology Strategy survey