For the insurance industry, and many others,
The extent to which insurers leverage data stored in the cloud for analytics varies, however. Applications for cloud data services such as security and other functions are catching on more readily, as industry observers and the providers themselves say.
Amazon Web Services (
"Insurers do a really good job of collecting data, but not always a great job of actually analyzing what they've got and then being able to drive predictions and insights out of that," said Nigel Walsh, managing director for insurance on the Google Cloud Platform (GCP). "Given the scale, and access to computing capabilities, gathering all those pipelines makes life much easier for carriers to join the dots much quicker."
Microsoft, which operates the Azure cloud computing platform, declined a request to speak about its offering and its insurance applications. Microsoft's newest quarterly numbers noted that Azure's revenue growth dropped from 31% in the first quarter 2023 to 27% in the second quarter, according to a Bloomberg
According to Nanda Rajgopal, principal analyst, insurance at Celent, who during April surveyed insurers on their moves to using cloud resources, AWS continues to lead in the market, with Microsoft Azure ranking second and Google's GCP growing in its efforts to compete with both of them.
Microsoft benefits from offering "attractive pricing" to companies already using Microsoft software in their operations, Rajgopal said, but Google is pursuing growth in similar fashion. "As companies tend to start moving towards Google Docs and all of those, that can give a little bit of an edge to the Google Cloud, as they can offer to bundle it up," he said. Google is also catching up in the cloud space on the strength of its AI and machine learning capabilities, Rajgopal added.
Rajgopal's survey, "Is Moving To Cloud Worth It?" had 68 respondents, 37% from life insurers and 63% from P&C carriers. About 53% of all respondents said they use cloud for data and analytics, and 37% said they use cloud for agent-broker portals, while less portions of the sample, ranging from 24 to 29% said they use cloud for marketing, web and mobile development, and intelligent automation.
"Monitoring social media and things like that has not caught on as much as I would have anticipated," he said. "That was a little bit lower than what I anticipated given the advancement in technology."
At present, insurers working to leverage cloud for functions beyond storage are most concerned about speed of implementation and the value that adopting cloud services will yield, according to Rajgopal.
"Speed was a very critical factor in the sense that if it is less than three months to implement, it was a huge success, while if it took more than two years, it was not liked at all, it was a huge negative," he said. "Operations efficiency was the value that was realized the most, while cost reduction was surprisingly at a very low end. The reason for that is they need to reorganize themselves once they are cloud enabled and successful with the cloud."
Aside from implementation time and operations efficiency, Google's Walsh and Amazon's Wallace point to data modeling capability, flexibility in adjusting to changes in risks and better data management as key values that could not be achieved without cloud data service.
"Do we need to change a policy every hour or every day or launch a new policy every hour of the day? Probably not," Walsh said. "Would we like the flexibility to be able to do it every four weeks, six weeks and every quarter. Absolutely."
Cloud data and computing resources could give insurers the ability to notify policyholders about wildfire risks, as well, according to Walsh. "That's when you start to add true value," he said.
Keeping data organized in one place, as with cloud storage, makes it easier to apply machine learning techniques, for instance, according to Wallace.
"Traditionally the way that you would get analytics done is you send your data to a software vendor and analytic software vendors. You essentially park your data with them. They would do the analytics for you," he said. "While that's worked fine for many years, there's such an explosion of innovation in security happening right now because of cloud and data being in cloud and the ability to innovate quickly on cloud, the security industry is really taking advantage of that to have a new offering."
