North American insurers are recognizing the value of leveraging cloud capabilities to drive increased agility, greater operating efficiency, cost reductions and other benefits. In my previous post, I outlined these benefits and how cloud capabilities are delivering them to North American insurers in increasing numbers, and taking cloud enablement to a new level as a true business asset.

However, embracing the cloud does not come without some challenges. In addition to the actual mechanics of transitioning to cloud, there are issues related to data privacy, architecture, system interfaces and IT security. These issues must be resolved before insurers can take full advantage of cloud’s enormous potential as a business asset in driving their cost and growth agendas.

By taking the right foundational steps and following a few guiding principles, insurers can successfully navigate these challenges and embark on a successful journey to the cloud.

How the journey begins: blueprint and roadmap

Before embarking on the journey to true cloud enablement, insurers should undertake a strategic assessment to help set the direction of their IT and business processes. The starting place for this journey is a business model blueprint.

Potential models include combinations of the following factors:

  • Infrastructure that is based on a shared pool of resources that can be rapidly configured, provisioned and released
  • Architecture design that allows for new levels of agility, flexibility and security
  • Application development that delivers fully managed “end-to-end” business solutions with low configuration and scalability


Five guiding principles behind the cloud implementation journey

While each insurer’s journey will be unique, the following five core guiding principles are applicable to most journeys to the cloud:

  1. Migrate non-core services to cloud to free up resources for activities that contribute to achieving a competitive advantage.
  2. Increase software as a service (SaaS) coverage to reduce software development and maintenance costs.
  3. Assess and transition other applications to infrastructure/platform as a service (IaaS/PaaS) to help reduce support costs for custom codes that provide a real competitive advantage.
  4. Reduce the use of custom code by moving to alternative platforms to achieve better quality at a lower cost.
  5. Limit the roster of vendors but maintain competition through a well-structured provider ecosystem that can help reduce operational complexity while maintaining pressure on pricing through competition.


A growing concern among insurers is how cloud costs can increase rapidly if not properly managed. Controlling costs requires monitoring and adjusting cloud operations, security operations, cloud enhancement services, application management and business process operations.

Leveraging a powerful business asset

The cloud landscape is complex and continues to evolve at a rapid pace. Through a strategic, comprehensive approach and the right ecosystem, North American insurers can use this powerful business asset to take giant steps toward creating the business models, operating efficiencies and customer experiences that drive success in a digital era.

For more detailed information about how insurers can make cloud a true business asset, please see our report North American Insurers: Making Cloud a Business Asset.

Chad Duncan

Chad Duncan

Managing Director, Cloud Enablement Lead, Financial Services Technology Advisory North America

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