As insurers are looking for ways to accelerate digital transformation, one of the most essential and inevitable developments that they will have to take on is adopting the cloud. Cloud computing means having the ability to leverage new business models and turn capital infrastructure expenses into variable costs. To discuss which factors that power (future) innovation from the cloud, we spoke with Tony Jacob, Head of Worldwide Business and Market Development, Insurance at Amazon Web Services (AWS). Tony leads a team of insurance technology experts who guide AWS’ strategies for helping insurers transform their data centers and to speed up innovation by developing and delivering new, cloud-native applications that change their customer experiences.
When it comes to the insurance industry, AWS does two things: it helps insurers transform their data centers, and it helps them innovate more quickly. AWS provides insurance customers secure, resilient global cloud infrastructure and services they need to differentiate themselves today and adapt to the needs of tomorrow. Building on AWS empowers insurance organizations to innovate and drive business growth in an evolving and increasingly competitive environment.
Adopting the cloud is no longer a matter of if but more a matter of how and when for insurance companies. For an insurance company that’s new to the cloud, how do you recommend that they think about a strategy for cloud adoption?
“Because of our depth and breadth of cloud services, insurers have many entry points for where they can begin to work with the cloud. We see projects across distribution, underwriting, and claims servicing, to core systems of record, to data science, where customers are uncovering new customer signals or supporting new and innovative insurance products.
Early on, the majority of the projects focused on the heavy workloads. We helped many insurers take advantage of high performance computing grids in the cloud to support their actuarial and catastrophe modeling solutions, and cloud infrastructure for core systems. This helps them retire technical debt, move away from some of the more expensive server and database licensing agreements, and free more of their IT budgets from the “run” spending category to “transform” and “grow.”
Lately, it’s gotten more interesting. Insurers are quickly stringing together AWS services like building blocks to deliver new and innovative solutions to the business, the end policyholders and producers, especially in the areas of artificial intelligence and machine learning, and in digital customer experiences. The insurtech startups have certainly embraced this approach, and their pace of innovation is game-changing. But, even the larger, more traditional insurers are also finding ways to embed cloud-based agility and speed in their IT organizations.”
How is AWS helping insurance companies change the way they do business and explore new business models?
“In short: new signals. AWS provides a broad collection of services that help insurers liberate their legacy data, enrich that legacy data by incorporating external and unstructured data sources, and expose that data to AI/ML services. The result is the ability to identify new signals that can manifest in many different ways — improved risk identification and pricing, greater customer intimacy, better service levels and reduced churn, increased claims fraud detection, decreased lapse rates — the sky really is the limit. Of course, it’s easier said than done. But, it is being done, in the cloud, and by insurers today.
We’ve all heard over the years that insurers struggle to access their data on rigid, inflexible legacy systems. By embracing the concept of the data lake, insurers are replicating their historical data into the lake, and making that data more accessible to many functions within the business. They’re also using the lakes to ingest external data sources to add to their legacy data, and to add to their understanding of their customers.
We’ve also heard that’s only half the equation. What do you do with the data once you can access it? And, by whom? Data scientists are a scarce commodity. To make that role more productive, and lower the technical requirements to be successful as a data scientist, we’re helping to provide pre-built, ">
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