New ways of working driven by users during 2020 are accelerating the shift to the cloud and highlighting the eventual winners, writes Scott Field, Head of International Product at Duck Creek Technologies
The cloud and its benefits are much the same as they were 12 months ago. Sure, technology continues to advance exponentially, but a far bigger recent change has been the transformation of people’s perceptions and priorities, caused by the adjustment of the insurance industry, and the entire economy, to cope with the Coronavirus pandemic.
Months of remote working, virtual meetings, electronic placement and trading, together with constant reliance on cloud data and software architecture, have undermined commercial lines insurers’ perceived reliance on physical systems and servers just as surely as companies are questioning their needs for office space and real estate. I think we are possibly witnessing a new era of the cloud and the emergence of a new set of leaders who have embraced internet communications providers such as AWS, Azure, Zoom, or Teams, and driven them to evolve their features and functions during last year.
It has only been a few years since any article about cloud adoption almost invariably focused on a trade-off of various perceived pros and cons which were entirely predictable: speed, cost, and efficiency-related savings leading the positives; cyber risks and business continuity concerns on the other side. It has been tough to dispel such suspicions in previous years, however secure the technology and however great the cloud’s benefits. It has taken the pandemic to change the balance in many minds. With the perspective of the pandemic, the cloud is seen as a source of resilience – rather than a threat to it.
The insurance market traditionally relies on ecosystems built among capacity providers, intermediaries, and service providers. Luckily, while placing a risk in person at Lloyd’s is not possible during a lockdown, the cloud relies on ecosystems to succeed, providing access to all the interrelated services and applications needed to conduct business – albeit from a laptop remotely, rather than in an underwriting room.
Nor is the shift a temporary sticking plaster. After 2020’s forced migration, the cloud’s accelerated adoption is set to continue. Forrester Research has recently upped its forecast for 2021, estimating that the global public cloud infrastructure market will grow 35% to reach $120bn this year. Insurers should view the cloud as an evergreen technology that will continue to deliver, whatever the season. With fears of startup disruptors and intense competition making product innovation, development, and time to market vital factors, the cloud offers the only efficient option for an ecosystem that is fast and efficient enough to deliver.
Momentum is inevitable, and so too are the winners emerging that will gain the scale and capital to become the heartbeats for innovation and really chart the course of evergreen technology.