June 2021 – In the last five years, insurers have gone from being highly skeptical of cloud computing to embracing “cloud-first” infrastructure strategies. This study is designed to provide insights into current cloud adoption rates, short-term potentials for change, and the pros and cons of adopting cloud computing based on recent insurer experiences. It is based on input from more than 80 insurer CIO members of the Novarica Research Council.
Key Points and Findings
- Cloud computing is growing. Since 2018, the percentage of insurers using cloud has increased from more than 70% to more than 90%. Three-quarters of insurers are planning to expand their use of cloud computing in the next 18 months; one-third plan to “expand significantly.”
- Cloud strategies are driven by agility and capabilities, not cost. Most insurers use cloud computing for storage and compute functions today, but security, APIs, analytics, and AI are increasingly being piloted and considered for future use.
- Security is a mild benefit; total cost and skills availability are concerns. About half of insurers see cloud computing as a net positive regarding security and cost variability but see total cost and skills availability as negatives on average.