By Jim Gahagan, Principal Product Marketing Manager, Financial Services, Workday
Then along came the cloud. Running software or storing data had long required on-premise infrastructure. With the cloud, companies could have their software delivered by a software-as-a-service provider, and also store and access their data in the cloud. As it’s matured, the cloud has made it possible for businesses to gain insights into real-time data from multiple sources, even bringing in artificial intelligence capabilities such as machine learning.
In fact, carriers who can effectively leverage the cloud for business operations and analytics are in the best position to navigate current and future challenges shaping the industry.Insurance companies have more legacy systems than meets the eye—many customer-facing touchpoints like sleek apps or user-friendly dashboards are connected to aging mainframes. Some carriers find themselves having to manage multiple claims, cash, and policy systems inherited with mergers and acquisitions.
Arvind Mathur, CIO of Prudential Assurance Company Singapore, told Forrester: “If we get operational efficiency right, we will generate the cash to invest in further enhancing customer experience.” The online nature of the modern consumer requires insurance companies to understand all their risks so they can make the best decisions about how to price competitively without losing money. Access to real-time data, both internal and external, helps insurers, for example, determine how to price home insurance based on catastrophic weather risks or price health insurance based on consumer lifestyles, and to better understand both their losses and profitability from claims.
But using brute force for ad-hoc reporting isn’t sustainable, especially given that one of the most significant shifts in regulatory reporting is on the horizon: , which goes into effect in 2021. Insurance in the U.S. is regulated at the state level, but IFRS 17 establishes a worldwide accounting standard that facilitates apples-to-apples comparisons of global insurance companies’ financial statements, increases transparency of policy profitability, and reduces incorrect valuations.