Insurance carriers can address cloud concerns and accelerate the transition to the cloud by taking action steps outlined in our report. Read more: https://www.accenture.com/ca-en/insights/financial-services/tech-advisory-cloud-readiness-insurance

1. TAKEINSURANCETO
NEW HEIGHTSDiscover how insurers use the speed and
flexibility of cloud to reach for new growth
Accenture Cloud Readiness Survey in Insurance
Financial Services Technology Advisory: Perspective on Cloud

2. Insurance companies—
not generally known as technology
pioneers—were initially hesitant
to move key applications and
business functions to the cloud.
New research titled “Accenture Cloud
Readiness Survey in Insurance” shows
that insurers have embraced the cloud
and have already transitioned many business
applications to a cloud environment.
In addition, surveyed insurers have begun
making plans and, in some cases, have taken
the first steps to move core platforms
to the cloud, although many insurers
still have a long way to go on that front.
2

3. In the past, insurers cited privacy and
security concerns, as well as the complexities
posed by migrating away from legacy
systems, as reasons to keep key operations
and applications in-house. Now, like other
financial services firms, they find they need
to deploy customer-facing applications to
drive growth, an objective for which the cloud
is ideally suited. And, as the Accenture Cloud
Readiness Survey in Insurance has found,
insurers are turning to the cloud to derive
significant benefits in terms of cost savings,
speed to market, capacity and flexibility.
In our global survey of 50 insurance company
executives including chief information
officers, chief technology officers, and chief
information security officers (conducted as
part of a broader financial services sector
study) we found that:
Insurers are further along in their cloud
strategy and implementation than might
have been expected, given the industry’s
reputation for being relatively slow-moving
in terms of innovation. In many cloud-related
areas, insurers are in fact outpacing their
banking counterparts. In similar research
into cloud readiness in the banking industry,
we found that only 26 percent of banks said
that core cloud practices and critical tools
were in place and have ongoing measures
of efficiencies for continuous improvement.1
In comparison, 46 percent of insurers said
that they had reached this state of maturity.
Only 14 percent of those surveyed said
they have not yet developed a cloud strategy,
nor even begun to think about the cloud.
5years
90%
11%
56%
68%
The time in which nearly all
insurance executives envision
a digitally transformed financial
services industry
of insurers have a coherent,
long-term plan for technology
innovation that reaches across
their entire company
of the average IT budget will
be earmarked by insurers for
the cloud over the next 3 years
of insurers have developed and
implemented a new IT operating
model to support the transition
to the cloud
of insurers have done
formal planning and analysis of
how to move legacy applications
to the cloud
3

4. THEBENEFITS
OFTHECLOUD
The cloud helps accelerate the
process of bringing new products
and services to market, but it also
helps insurers integrate mergers
and acquisitions, lower overall
IT costs, improve reliability and
deliver better customer service.
Different insurers see different benefits from
the cloud, depending in part on geography
and in part on their current level of adoption.
Among North American insurers, Novarica,
Inc. has found that improved capacity,
flexibility and speed, along with fewer
demands for maintenance, are among the
most important perceived benefits.2
This is
especially true for carriers that already have
most of their infrastructure on the cloud.
North American insurer Liberty Mutual
Insurance said it realized infrastructure
savings of minimum 30 percent by moving
to a single cloud-based platform, in addition
to accelerating time to market, increasing
security, providing access from a range of
devices, and offering bilingual capabilities
in its business benefits unit.3
4

5. Figure 1: Benefits of Cloud
Overall, cost savings is the benefit most
frequently cited by insurers in our survey
(as seen in Figure 1 below). One example:
Towergate Insurance, one of Europe's largest
independently owned insurance intermediary,
realized a 30 percent year-on-year run rate cost
reduction from 2017 onward after migrating
its core applications to the public cloud.4
We have found that insurers also see
unexpected benefits from the cloud, such as
better use of data, leading to better analytics
and improvements in risk assessment and
pricing. Cloud capabilities offer greater speed
to market and stronger support for innovation
through DevOps and agile methodology.
Cloud is a key element in major technology
trends re-shaping the insurance industry,
as identified in Accenture’s annual
Technology Vision 2019 report.5
For example, one of the five major
trends noted for 2019 is “Get to Know Me,”
which relates to insurers seeking to “unlock”
unique consumers and unique opportunities.
More than eight in ten (84 percent) insurance
executives surveyed for the Technology Vision
2019 report agree that digital demographics
give their organizations a new way to identify
market opportunities for unmet customer
needs. Cloud provides a way of organizing,
analyzing and accessing this digital insight.
The Technology Vision 2019 report cited
“Human + Worker” as another key trend,
with each worker empowered by their
skills and knowledge plus a new set of
tech-driven capabilities. Insurers should
adapt technology strategies to support
a new way of working in the post-digital
age, and the cloud is playing a pivotal role.
0%
32%
38%
40%
42%
44%
44%
46%
48%
58%
Other
Ability to scale up and down when needed
(elasticity)
Greater agility
Ability to launch applications faster
Better security
Ability to provision IT capacity faster
Less systems and applications downtime
(planned and unplanned)
Free up internal resources
More visibility into and control of IT usage
Cost savings
Source: Accenture Cloud Readiness Survey in Insurance, June 2019
5

6. DESIGNINGA
CLOUDSTRATEGY
Since cloud capabilities are
expected to underpin insurers’
future efforts in product development,
operations management and customer
service, a cloud strategy has become
an essential part of their overall
business strategy.
Growth now increasingly depends on
cloud adoption, so insurers should have
a clear strategy developed in collaboration
with the business units to add new cloud-based
capabilities (and to move existing capabilities
to cloud platforms). But they should also
be aware that migration to the cloud can
be a complex undertaking with many
organizational dependencies.
The cloud has become an enterprise-wide
endeavor. Nearly two-thirds (60 percent)
of respondents to the Accenture Cloud
Readiness Survey in Insurance said they are
looking at a corporate-wide business case
when it comes to the cloud, while only
36 percent said they still looked at the cloud
on a case-by-case, project-by-project basis.
And more than half (58 percent) of insurers
said they have a cloud strategy execution
map, with KPIs to measure progress.
(An additional 42 percent have a cloud
strategy execution map without KPIs.)
All respondents said that the transition
to the cloud would require a new IT operating
model, and, as mentioned, 56 percent have
already defined such a model for implementation.
An additional 36 percent are in the process
of defining the model, while only eight percent
have not yet begun the process.
Even with this progress, however, 64 percent
of insurers say that less than half of their lines
of business (LOBs) are currently using cloud.
6

7. Figure 2: Planned Cloud Expenditures
The respondents said they will back
their strategic planning with significant
spending on the cloud. As seen in
Figure 2 below, nearly 11 percent of insurers’
IT budgets will be earmarked for the cloud
over the next three years.
Interestingly, nearly two-thirds (62 percent)
of respondents said that their IT teams
and their line of business (LOB) executives
had discussed cloud strategy and were
in alignment about planned activities.
The remaining 38 percent said preliminary
discussions among IT and LOB executives
were under way.
2% 8%
64%
38%
28%
46%
6% 8%
Currently Over the next
3 years
16 – 20% 11 – 15% 6 – 10% 1 – 5%
9.9% 10.7%Average % spend
Source: Accenture Cloud Readiness Survey in Insurance,
June 2019
20-point
increase in the
next 3 years
7

8. TACKLINGCLOUD
APPLICATIONS
Some insurers have hesitated
in their move to the cloud due
to concerns about keeping their
core systems highly functional.
Now, however, they can take a
“cloud-enabled” approach to migrating
key applications. They can work with multiple
vendors to confidently migrate to the cloud
while maintaining the effectiveness of core
systems throughout the journey. And carriers
are learning how to capture greater value
from their investment capital to smooth the
transition from old businesses to new ones.
Insurers recognize the need to modernize
applications for the cloud. Four out of five
(80 percent) of respondents to the Accenture
Cloud Readiness Survey in Insurance said they
had already developed a strategy for application
modernization, and nearly all who have not
developed such a strategy said this is planned
for the next 12 months. Only two percent said
no such plans were under way.
Similarly, more than two-thirds (68 percent)
of respondents have done formal planning and
analysis of legacy applications for migration
to the cloud, and the remaining 32 percent
plan to do so in the next 12 months. Nearly
two-thirds (60 percent) of insurers surveyed
have conducted code-level assessments and
have confirmed the application migration
type and effort, while two-thirds (66 percent)
have developed a cloud-native application
development strategy. As is the case with
formal planning and analysis, 32 percent plan
to do this in the next 12 months, while only
two percent have no plan in place. And insurers
are well-advanced in their evaluation of
software-as-a-service providers, with 40 percent
currently evaluating providers and 60 percent
having completed their evaluation.
8

9. Figure 3: Candidates for Cloud Migration
It is important to note, however,
that there is a significant gap between
aspirations and reality in terms of cloud
strategy. While many respondents have
plans and/or pilot programs in place,
few companies have completed work
on major cloud applications. Core platform
transformation in key areas such as policy
administration and claims management
is rarer still.
However, insurers have identified
a mix of critical applications as candidates
for migration to the cloud. Figure 3 below
shows databases are the leading candidate,
followed by analytics and business
intelligence, and the company website.
Next in line are enterprise resource planning
(ERP), customer relationship management
(CRM) and e-mail, followed by human
resources, collaboration and e-commerce.
6%
8%
4%
2%
2%
6%
36%
22%
32%
20%
26%
22%
14%
14%
12%
6%
30%
48%
28%
44%
34%
30%
34%
26%
20%
24%
28%
30%
32%
32%
38%
48%
52%
58%
62%
70%
eCommerce and online tools
Collaboration/
content management platforms
HR
Custom business application
CRM
Email
ERP
Website
Analytics/business intelligence
Database
Already moved to cloud
Currently moving to cloud
Planned to move to cloud in the next 12 months
No plan to move to cloud in the next 12 months
Source: Accenture Cloud Readiness Survey in Insurance, June 2019
9

10. Insurers’ evaluation of other application-
related services might best be described
as uneven. We found, for example,
that more than half of Accenture Cloud
Readiness Survey in Insurance respondents
have evaluated platforms-as-a-service
and/or vendors, but only 38 percent have
completed their evaluation of application
development services.
They do, however, show a relatively
high degree of sophistication in software
development, with 64 percent using agile
methods and 56 percent using DevOps.
More than eight in ten (84 percent) insurers
are using cloud-based internet of things
(IoT) and over half (52 percent) use cloud-
based analytics solutions. Insurers also use
serverless technologies (44 percent), cloud-
based artificial intelligence (22 percent) and
microservices (16 percent) to some extent.
Importantly, 88 percent of respondents
said they have developed a strategy
for application programming interfaces
(APIs), with 30 percent saying they have
a comprehensive set of API-related services
and a standardized governance and
management model for consistent operations.
Another 42 percent have identified API
owners and sponsorships to understand
associated levels of responsibility.
As Figure 4 illustrates, insurers are adopting
a variety of tools to “optimize” the use of
cloud services, with automation, self-service
and orchestration tools among the most
prevalent. While 66 percent of respondents
said they have implemented such tools,
only 22 percent have implemented tools
for measuring the business value of cloud
services provided, and only eight percent
have in place tools for granular metering
and charge-backs to business units and
teams consuming cloud services.
Figure 4: Use of Tools to “Optimize” Cloud Services
Implemented
Being implemented
Planned to implement in the next 12 months
No plan to implement
4%
2%
44%
28%
18%
4%
12%
44%
48%
32%
42%
22%
8%
22%
50%
54%
66%
Cloud-related automation,
self-service and orchestration tools
Standardized ROI and business-case
tools to evaluate the costs and
benefits of cloud resources
Monitoring and reporting tools
across private, hybrid and public
cloud applications and services
Tools for measuring the business value
of the cloud services you provide
Tools for granular metering and
charge-back to business units/teams
consuming cloud services
Source: Accenture Cloud Readiness Survey in Insurance, June 2019
10

11. Earlier Accenture research found that
60 percent of insurance companies
replace their legacy infrastructure every
three to six years.6
This means insurers
can optimize their IT replacement cycles
with a migration to the cloud.
Similarly, the cloud can help reduce
unnecessary capital expenditures and reduce
the number of data centers, improving asset
utilization. We found that insurers surveyed
as part of the Accenture Cloud Readiness
Survey in Insurance demonstrated good
progress in addressing organizational,
infrastructure and talent issues related to
cloud transition. For example, more than
half of insurers have identified the
appropriate internet-as-a-service solution,
while 38 percent are still at the evaluation
stage. And nearly three-quarters (74 percent)
have implemented the metering and billing
of cloud consumption, while the rest plan
to do so in the next 12 months.
Almost half (48 percent) of respondents
said they have completed the end-to-end
operational management and control
of on-premises cloud technologies and
integration of tools into a unified cloud
management platform (CMP), while
38 percent said they plan to start this process
in the next 12 months. Almost all (94 percent)
of respondents use or plan to use a CMP.
Among infrastructure-related functions,
insurers have initially focused on moving
data backup and archiving, security and
disaster recovery to the cloud, as seen
in Figure 5 below. Insurers are leaning to
cloud for security to standardize, govern
and automate capabilities like anti-virus,
security patches and access control.
Figure 5: Movement of Infrastructure-Related Functions to the Cloud
Already moved to cloud
Currently moving to cloud
Planned to move to cloud in the next 12 months
No plan to move to cloud in the next 12 months
2%
2%
30%
20%
14%
16%
6%
4%
2%
36%
38%
42%
36%
24%
26%
22%
34%
40%
44%
48%
68%
70%
76%
Workplace
Business continuity
Network
Servers
Disaster recovery
Security
Data backup/archiving
Source: Accenture Cloud Readiness Survey in Insurance
11

12. ORGANIZATION
ANDTALENT
A majority of insurers surveyed
for the Accenture Cloud Readiness
Survey in Insurance have or plan
to have a dedicated team in charge
of the definition and execution of
their cloud strategy, with 60 percent
saying such a team is in place and
24 percent saying such a team will
be in place within the next 12 months.
But, despite the proliferation of complex,
business-wide cloud cases among insurers,
only half of respondents see their skills
related to cloud strategy as “mature”
and even fewer regard cloud applications
(36 percent), development (32 percent)
and infrastructure (12 percent) as mature.
Nevertheless, 58 percent of respondents
said they have a dedicated team in place
to help cloud users, and 30 percent plan to
have such a team in place within 12 months.
Scale, in terms of IT training, is another
important consideration for surveyed
insurers. It is one thing to train teams to help
cloud users and another thing altogether
to train and/or re-skill large IT teams in areas
including data, security, and core platforms
such as policy administration and claims.
12

13. MANAGING
THECLOUD
Despite the importance of
a comprehensive inventory
of cloud use within the organization,
only half (50 percent) of the
Accenture Cloud Readiness Survey
in Insurance respondents said they
have completed such an inventory
(although 34 percent plan to do
so in the next 12 months).
As is the case with cloud strategy,
the absence of a cloud use inventory
may present obstacles to executing
company-wide cloud cases.
Cloud security is another identified
vulnerability for insurers. Only 36 percent
saw their current policies on cloud-related
security as being mature.
However, 58 percent said they had
completed a planning process for cloud
security, and 32 percent said they had begun
planning on this topic. Over half (54 percent),
meanwhile, have completed planning
on cloud-related regulatory processes.
While cloud security remains a concern,
we have observed that, in practice,
insurers that work with cloud providers
gain confidence in the security capabilities
of the top providers and come to believe
that the move to cloud results in significant
security advantages. External research
supports this conclusion, as well.
13

14. ACTIONSTEPS
Many insurers have completed critical
steps in the transition to the cloud
and others are well along the way.
Major concerns remain, however, including
shortages of talent with needed skills and/or
experience and important applications such
as HR and e-commerce which have low rates
of movement to the cloud.
As our Accenture Cloud Readiness
Survey in Insurance indicates, insurers
have made good progress in developing
cloud strategies and in adopting the
needed tools and technologies for
moving production to the cloud at scale.
1. Set priorities
In addition to thinking about applications
that can readily be moved to the cloud,
insurers should be engaged in analysis
to identify cloud-based applications that
can have immediate business impact.
3. Assess processes
and tools
For insurers, to effectively move
production to the cloud at scale,
automation, self-service and orchestration
are key, in addition to a mindset that
prizes fast, broad-based production.
2. Build skills
Given the shortage of “mature” talent,
insurers should invest in talent and
training as well as technology when
setting cloud budgets.
4. Strengthen the links
between IT and business
Insurers should be thinking about extending
the cloud’s reach into LOBs, where the
cloud is still under-represented. There
has been good progress in getting IT and
LOBs talking but more should be done.
Insurers can address these concerns by taking the following action steps:
To fully realize cloud’s potential,
however, insurers would have to overcome
barriers including shortages of key talent,
ongoing security concerns, and harmonizing
the efforts of IT and the LOB to increase
efficiency and accelerate the development
of profitable new products and services.
Resources in areas such as training, specific
implementation skills, and scaling up once
the cloud is in place are readily available
from third parties, freeing insurers from
permanently staffing in these disciplines.
The barriers to cloud implementation
are falling quickly and, as our research
indicates, insurers are moving to exploit
this transformative technology.
14

15. References
1. “Accenture Cloud Readiness Report –
Banking,” Accenture, September 2018.
Access at: https://www.accenture.com/
t20181029T101708Z__w__/us-en/_acnmedia/
PDF-85/Accenture-Technology-Advisory-
Cloud-Readiness-Banking.pdf#zoom=50
2. “Cloud Adoption in Insurance: Trends and
Issues,” Novarica, March 2018. Access
at: https://novarica.com/cloud-adoption-
insurance-trends-issues
3. “Liberty Mutual uses New Technologies
and Agile Approach to Develop Cloud-
Based Solution Providing Competitive
Advantages,” Liberty Mutual portal. Access
at: https://www.libertymutualgroup.com/
about-liberty-mutual-site/news-site/Pages/
Cloud-based-Platform-for-Benefits-Business-
Unit.aspx
4. “Accenture Completes Cloud-Based IT
Transformation for Towergate, Helping
Insurance Broker Improve Its Operations
and Reduce Annual IT Costs by 30 Percent,”
Accenture news release, September
25, 2017. Access at: https://newsroom.
accenture.com/news/accenture-completes-
cloud-basted-it-transformation-for-
towergate-helping-insurance-broker-
improve-its-operations-and-reduce-
annual-it-costs-by-30-percent.htm
5. “Accenture Technology Vision 2019,”
Accenture 2019. Access at: https://www.
accenture.com/ca-en/insights/technology/
technology-trends-2019
“Accenture Technology Vision for Insurance
2019,” Accenture 2019. Access at: https://
www.accenture.com/ca-en/insights/
insurance/technology-vision-insurance
6. “Insurers, Next Time You Replace Your
Legacy Systems, Migrate to Cloud,”
Accenture, October 21, 2016. Access at:
https://insuranceblog.accenture.com/
insurers-next-time-you-replace-your-legacy-
systems-migrate-to-cloud
15

16. About Accenture
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services company, providing a broad range of
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unmatched experience and specialized skills
across more than 40 industries and all business
functions—underpinned by the world’s largest
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intersection of business and technology to
help clients improve their performance and
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With more than 482,000 people serving clients
in more than 120 countries, Accenture drives
innovation to improve the way the world works
and lives. Its home page is www.accenture.com
About Accenture Research
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data-driven insights about the most pressing
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the power of innovative research techniques
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industries, our team of 250 researchers and
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and allows us to transform theories and fresh
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Visit us at www.accenture.com/research.
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Contact us
Chad Duncan
Managing Director
Accenture Financial Services,
Technology Advisory Lead, North America
chad.duncan@accenture.com
Darcy Dague
Managing Director
Accenture Financial Services,
Insurance, North America
darcy.v.dague@accenture.com
Siki Giunta
Managing Director
Accenture Technology,
Cloud Strategy Lead, Global
siki.giunta@accenture.com
Douglas Chandler
Research Manager
Accenture Research Cloud
& Infrastructure, Global
douglas.chandler@accenture.com
André Schlieker
Research Senior Manager
Accenture Research Insurance, Global
andre.schlieker@accenture.com
Accenture Financial Services
Technology Advisory
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