Written by Paul Kershaw on December 8, 2021

Is cloud the key to adaptability and flexibility at speed?

Insurers are considering fundamental questions about their businesses as they decide what applications to build and how to deploy them on the cloud. Padraig Floyd speaks to insurers about how they are targeting their investment and effort as they aim for digital transformation.

Moving to the cloud and having the ability to develop and launch new and innovative products rapidly can bring with it some interesting existential questions.

A core element of digital transformation is to deliver a better product and service to the end customer, says GRP’s Berry. But just because you can develop new and innovative products in different areas or form partnerships with other platforms doesn’t mean that you automatically should. “We have to be very mindful of our current distribution channel,” says Berry. “We are not going to disintermediate our distribution channel. However, if we were developing in new areas in the future, and the next big thing was holiday cover for flip flops, which hadn’t been distributed through our traditional channel in the past, there might be options for that kind of growth.”

Clarke expects momentum to increase behind transformation projects but says there is a major challenge many companies are simply unaware of. “One of the barriers to going fast is a lack of understanding about their digital maturity and, as a result, where to target their investment and effort,” says Clarke. “Companies need to ask themselves not how much, but what’s the value? Also, consider the value of these capabilities, in particular the top-down ones, because there might not be an immediate demand for them. Even so, those capabilities are a good foundation to enable bottom-up development.”

Winning hearts and minds

Culture remains a key obstacle to successful transformation, says Clarke. External companies will talk about tool sets when it comes to devops etc., but tool sets are the easy bit. He is something of an evangelist for project learning and understanding and the approach his team uses is one of vanguard projects and taking people on a journey. “Some will be doubtful if they haven’t tried an agile or devops approach before, but if they are supported properly, they will become advocates and never want to go back to old ways,” says Clarke. “There is no point in looking at a linear delivery with a fixed point in the future anymore. It is just impossible. Vanguard or lighthouse projects prove and demonstrate the new ways of working.”

This chimes with the views of Callum Rimmer, founder of pay as you go motor

insurer, By Miles. Naturally, he is an advocate for a modular approach, but he argues that the problem isn’t so much legacy, as understanding how to manage legacy, as transformation is not a one-time project. “What you really need to get your head around is that if you want to have a future, you must build solutions that you know you will have to throw away every two to three years,” says Rimmer.

Insurers need to understand that what they know now won’t be sufficient in two years’ time and will require things to be updated or replaced. A modular approach using decoupled microservices will allow new components to speak to one another provided communication channels are retained, he continues: “Take a very modular micro service approach to the way you build things, and you constantly evolve, iterate, change with your ability to make change. That helps protect you from getting too bogged down in a massive monolithic legacy system, which makes it very hard to innovate for the future.”

Grace at Markerstudy agrees that cultural change is essential if businesses are to adapt to the new digital world. But now, at least, the technology exists for insurers to innovate and grow – provided they embrace the cloud and create sustainable and resilient business models. “Open APIs are vital for our industry, and companies that do not join this journey will struggle,” adds Grace. “Modern ecosystems are a web of interconnected smaller systems, and APIs are the connective tissue that hold it all together.”

“There is no point in looking at a linear delivery with a fixed point in the future anymore. It is just impossible. Vanguard or lighthouse projects prove and demonstrate the new ways of working.”

Barrington Clarke

Sponsor view Jeff Picozzi, global insurance lead, Red Hat

For insurance companies, the cloud represents a great many things. The cloud can help insurers deliver new products and services, improve the customer experience, increase scalability, and reduce costs. Still, like most things, the devil is in the details, and how you build your cloud infrastructure will impact the efficacy of your cloud strategy.

Most insurers are not debating whether they should or should not adopt the cloud. Instead, it is more about finding the right balance between what applications can and should be built and deployed on the public cloud v private cloud v on-premises – without creating more silos between them.

We at Red Hat have worked with many insurance organisations as they start or continue their journey to the cloud. Our experience has shown that taking a view from the ground floor (the infrastructure layer) can help insurers build a flexible foundation, incorporating heritage systems with a modern containerbased hybrid cloud. This infrastructure allows you to connect and integrate your systems into a single, unified hybrid environment. In addition, it provides a consistent foundation for building and deploying applications across on-site and cloud infrastructure as needed.

An open hybrid cloud environment with an effective container platform helps deliver cloud-native capabilities such as self-service provisioning of preapproved resources on-demand, eliminating wait times, and speeding development and operations. The flexibility of a container-based open hybrid cloud also offers a broad, consistent set of tools, libraries, and runtimes so developers can work with their preferred tools, which is critical for attracting and retaining much sought-after talent.

“Still, like most things, the devil is in the details, and how you build your cloud infrastructure will impact the efficacy of your cloud strategy.”

Jeff Picozzi
Article written by Paul Kershaw
Paul has over 25 years of Directorial experience within the Financial Services and Insurance Broking industries, including organisations such as Clerical Medical, Ardonagh Group and Marsh & McLennan.

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