In my previous post, I discussed several aspects of cloud in insurance, including opportunities and key areas of impact, as well as current status and future trends.

So, how can insurance companies ensure their journey to cloud starts off in the right direction? And how can they manage it successfully while keeping costs low? These questions will be the topic of this post.


It all starts with new business models

For most insurers, the journey to cloud begins with the development of a blueprint for their business model.

These models may include several combinations:

  1. A new infrastructure model, based on a shared pool of resources that can be rapidly configured, provisioned and released.
  2. A new architecture model, for new levels of agility, flexibility and security.
  3. A new application model through which completely managed “end-to-end” business solutions can be provided with low configuration and scalability.

While the journey to cloud will likely differ by insurer, five core principles almost always apply:

  1. Transition non-core services to cloud. Using Business Platform as a Service (BPaaS), insurers can have a service provider handle work that does not yield a competitive advantage, such as human resources, procurement, trade settlement and accounting, at a lower cost with higher quality.
  2. Increase Software as a Service (SaaS) coverage. Wherever possible, carriers should reduce software development and maintenance costs by increasing the use of SaaS.
  3. Assess and migrate other applications to Infrastructure as a Service (IaaS)/Platform as a Service (PaaS). Carriers can use standardized IaaS and PaaS platforms to reduce support costs for custom codes that provide a real competitive advantage.
  4. Reduce use of custom code. Insurers should quantify and measure their progress toward reduction of custom code in the organization, moving to alternative platforms for better quality and lower maintenance costs.
  5. Reduce vendor count but maintain competition. A well-designed provider ecosystem can help reduce operational complexity while maintaining pressure on pricing through competition.


Modernization and transformation

Attaining the benefits of cloud requires material modernization and re-engineering of insurance applications—most of which were built for traditional, on-premise platforms. But the application modernization process itself prepares insurers for a state of cloud resilience, known as becoming “cloud native.”

Application modernization also facilitates the transition toward microservices, as well as technology and design pattern re-use, which can reduce technical debt and increase agility.

MetLife, for instance, is using containerized microservices to improve its agility. The containerized microservices allow the insurer to break the business logic of old, monolithic applications into smaller pieces and deliver a more modern user experience on top of its legacy systems of record. In this way, MetLife has been able to reduce virtual machines in use by 70 percent.1


Application migration

With platform and infrastructure transformation under way, insurers can now prepare for an application migration program, with applications inventoried and the migration type and effort determined.

At this stage, it is important to remember that cloud provides support for insurers’ moves into important new technologies, such as robotic process automation (RPA) and artificial intelligence (AI). Not only does cloud make it easier to implement these technologies, it also offers the structure needed to organize and access the vast quantities of data generated by these innovations.


The operating model is critical

It has been our experience at Accenture that, typically, larger firms move to a multi-cloud environment, while smaller firms tend to take a single cloud provider approach. But this is an individual choice, and each insurer should consider which operating model and cloud management platform is most appropriate for its business.

While most cloud discussions involve technology, the operating model is the cornerstone, because it involves people, processes, tools and governance.

Cloud solutions are non-uniform; thus, insurers should be aware that multispeed operating models will co-exist for years to come, while people, process and tools remain interoperable. The right operating model is the key to increased agility, technology operating efficiencies—and reducing infrastructure costs.


Components of effective cloud management

While the costs associated with cloud-based solutions have the potential to grow quickly, an effective cloud management can be the difference between achieving the business case and missing the mark.

Ideally, insurance carriers should adopt automated management tools to achieve more control over costs, improve governance, and increase accountability in their cloud consumption.

Effective cloud management consists of five critical components:

  1. Cloud operations, including support, cloud engineering, cloud service management, service desk and monitoring.
  2. Security operations, defined as flexible cyber and data protection services that can secure cloud environments and infrastructure.
  3. Cloud enhancement services, or managing cloud costs through analytics, actionable recommendations and operational improvement, as well as application remediation and re-architecture.
  4. Application management, including support, ongoing maintenance, enhancements and upgrades.
  5. Business process operations, the business layer on top of cloud technology assets and services that is focused on delivering improved business outcomes.

Among these components, application management is of particular importance to any insurer’s cloud plan. With proper architecture, design, development, testing, maintenance, modernization and renewal, insurers can achieve cost efficiencies, continuous optimization and ongoing innovations within their application portfolio.

In conclusion, the cloud landscape is complex and continues to evolve rapidly. However, with a strategic, comprehensive approach and the right ecosystem, insurers can use the cloud to take giant steps toward creating the business models, operating efficiencies and customer experiences needed for success in a digital era.

With the right strategy and support, cloud is bound to become a critical driver for high performance in the insurance industry.

To learn more, access our Insurance Cloud: From Tactical to Strategic Investment report. You may also be interested in our Technology Vision for Insurance 2018 report.



  1. “Docker Enterprise Edition Lights a New Spark of Innovation Within MetLife”, Docker, May 3 2017. Access at:


Richard Leroy

Richard Leroy

Managing Director, Accenture Financial Services Technology Advisory, Cloud Advisory lead Europe

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