How will a data cloud strategy enable the Insurers of the future?

The Insurance of the Future

While traditional strategic imperatives (customer segments, risk appetite, products and services) remain very valid, two new strategic dimensions will shape the future of insurers:

• The ability to offer an end-to-end frictionless customer experience
• The positioning on the value chain and the level of openness and connectivity to other players or sectors

In its report ‘Insurance of the Future’, Deloitte identifies three business models that should lead the market by 2025:

• Core insurer: Companies focusing on core insurance products and skills, ensuring a good customer experience
• Beyond insurer: Companies providing core insurance products and additional services delivering added-value for the customer across the insurance value chain
• Exponential insurer: Companies moving beyond the insurance value chain to conquer new markets by leveraging efficient external partnerships and being part of winning ecosystems. At least three ecosystems—mobility, health, and smart cities—are emerging in Belgium, representing equally opportunities and threats for the sector.

These three leading models will require higher interconnectivity (in and out) and better accessibility to the data (decisional and transactional).  

Moving to the cloud

With this aim in mind, forming collaborative partnerships or ecosystems, where data is shared, appears to be one of the low-hanging fruits to realise the potential of data.

The volume and velocity of data to deal with will be much higher than ever, forcing insurers to further invest in their capabilities to store and compute their data assets.

Moving to the cloud is one of the strongest enablers for insurers to respond to these new ecosystems . Indeed, according to Forrester’s research, we can identify three key business needs for analytics in the cloud: 

• Agility: Leverage the ability for fast deployment to respond quicker to changing business needs. There is a 37 percent decrease in average time to deploy new applications.
• Speed to value: No more time-consuming design, engineering and setup. Everything is available for immediate onboarding. There is a 22 percent decrease in size of application development teams.
• Enterprise features: More capabilities and custom features, fully capable to answer demanding enterprise requirements.

Furthermore, a recent Deloitte survey suggests that cost and performance of IT operations as well as data modernisation are top business drivers for cloud migration.

Organisations would naturally like to have modern database systems without the burden of all the maintenance efforts and focus on getting insights from data analytics. Traditional, on premise data warehouses are often no longer relevant in meeting those needs.

Less ‘having’, more ‘sharing’

If we consider this from a slightly different angle, the sharing economy has been disrupting numerous industries over the last years.

Let us take the example of the car industry. In its report ‘Future of Mobility’, Deloitte identifies the car as being the second most expensive item that most of us will buy. Yet, it sits parked 96 percent of the time.

This simple yet illustrative fact strongly challenges the idea of ownership. Why would individuals need to own something and bear the full costs and efforts of ownership (maintenance, insurance, value depreciation, parking, etc.) for a very limited usage?

In a similar vein, by 2025, some insurers will also be part of mobility ecosystems. Instead of insuring a given vehicle, a journey from point A to point B will be covered (irrespective of the vehicle and its owner).

This ‘pay-as-you-use’ principle-based economy is gaining momentum in information management as well.
 

Snowflake and Deloitte Alliance

A new alliance has recently been announced between two market leaders, Snowflake, a disruptive cloud data platform, and Deloitte, the market leader in analytics integration.

The Snowflake cloud data platform is uniquely positioned to support the insurance market’s data initiatives:

• It is the only multi-cloud data platform that elastically manages compute resources for maximum throughput and concurrency, while utilising the public cloud storage layers.
• Snowflake has been natively built on a public cloud infrastructure that allows you to separate storage and compute. This means that you can size your storage and compute independently against the cost of your actual usage. Isolate an unlimited number of workloads, where one user group’s activity does not interfere with any other activity on that same data.
• Secure data exchange allows organisations to unite business units and collaborate with their business partners via governed and secure data sharing in real-time.
• Snowflake has a rich eco-system of technology partners who integrate seamlessly with the platform and helps companies to utilise existing tooling.  

This alliance perfectly fits into current market trends, offering organisations the possibility to embark on a cloud modernisation journey.