Insurers are largely planning to expand their cloud usage into new areas in the coming months, according to a new Novarica study.
Approximately 75 percent of insurers said they would expand their use of cloud computing in the next year-and-a-half, with one-third planning to do so “significantly,” Novarica found.
This follows a continued upward trend going back to 2018. Since that time, the percentage of insurers using cloud computing grew from more than 70 percent to above 90 percent. Over that same period, insurers running most or all of their infrastructure on the cloud jumped from 12 percent to 18 percent, the Novarica report explained.
While most insurers use cloud computing for storage and computing function, insurers want to bring much greater functionality into the mix. According to the report, insurers are piloting cloud-based security, APIs, analytics and AI for their daily processes.
Insurers varied by size in terms of the boldness of their cloud plans. About 44 percent of large insurers said they’d expand their cloud usage significantly, but only 27 percent of midsized insurers felt the same way. About 24 percent of midsized insurers had no plans to change their cloud usage, while only 8 percent of large carriers felt the same way, though most of them already used the cloud in some part of their business.
Why would insurers expand their cloud strategy? According to Novarica, the desire to avoid having data centers remains a key driver for about 40 percent of insurers. Most, however, wanted to also be more agile, adding new capabilities such as serverless computing, better APIs and also big data analytics possible with the cloud computing option.
Novarica’s new report is “Cloud Computing In Insurance: Current Adoption and Plans.” The firm tapped 83 insurer CIO members of its Novarica Research Council, representing both P/C and life/annuity insurers of multiple sizes and varying business lines.