The Doppler Quarterly Summer 2019 | Page 88

Insurers Embracing New Technologies and Business Models Insurers have been comparatively late to the cloud because the industry is, by nature, risk averse and conservative. Leg- acy insurance applications have invested heavily in data centers over the years to store troves of data and run big, enterprise applications often serving millions of customers. Many of the applications that support old-line business functions, such as life insurance policies, were written 20 to 30 years ago. Rearchitecting many of these applications to run on the cloud has generally been cost and time prohibitive. But executives are now being pushed by the marketplace to embrace new technologies and new ways of doing business. On the front end, they are using cloud to enable digital business models that improve business agility through speed to market, flexibility and a more custom- er-focused approach. On the back end, cloud is enabling greater IT efficiency, with systems that are highly automated and event- driven, enabling a higher quantity and quality of releases. There are many ways insurance companies are using tech- nology to respond to the threats of digital disruption. Here are a few examples of how skillful uses of cloud and data are positioning companies to compete strategically in the com- ing years. A Focus on Innovation What would the insurance industry look like if it were not tied to so many legacy systems and processes? A fleet of startups have answered that question in recent years by creating cloud-first business models that attempt to streamline the delivery of insurance services. One innovator, Lemonade, describes itself as an “insurance company powered by artificial intelligence and behavioral economics.” Homeowners and renters click on a Lemonade app and talk through their claims with an AI-driven bot. Artificial intelligence processes the information and replicates the tasks a claims agent would go through. The company says mobile users generally get insured in 90 seconds and get paid for claims in three minutes. Insurers have used the cloud's strength and flexibility to do more than develop and deploy consum- er-friendly apps. The cloud has also allowed them to experiment. Customers are comfortable using on-demand, consumer-friendly applications in their daily lives, so they are pushing for mobile apps to serve their insurance needs. Executives at established insurance companies are seeing startups get up and run- ning fast with cloud technology creating an on-demand approach, and they realize they will lose market share if they do not follow suit. The numbers show that executives are buying into the cloud transformation trend and the larger digital disruption movement. A study by independent analyst firm Ovum revealed that 67 percent of insurance industry CIOs believe SaaS will completely transform the insurance industry in five years or less — and 20 percent believe it will happen in less than two years. 86 | THE DOPPLER | SUMMER 2019 Another innovator, Oscar, built a cloud-first health insurance business on AWS. One of its co-founders, CEO Mario Schlosser, is a data scientist who studied AI at Stanford. Another co-founder, Josh Kushner, is White House senior advisor Jared Kushner’s brother. They used the cloud to create a mobile app that lets members quickly schedule appointments, pay bills and check histories. More than 40 percent of Oscar’s members use the app and website to manage their health every month, and 43 percent of mem- bers' first visits to a doctor are routed through Oscar. Suncorp Group Limited, based in Australia and founded in 1902, is a good example of an insurer using new, digital-in- spired applications to streamline its business. Five years ago, it overhauled its insurance claims assessment process,