Guest blog by Mazahir Valikarimwala Industry Senior Director – APJ SAP
The Asia Pacific region is starting to wake up to the potential of the cloud. Insurers should take a close look at the trends and benefits
Four years ago, people would have laughed at you if you’d talked too long about the cloud. Now though, it’s a reality. One that has some fascinating trends and exciting potential.
The drivers are clear. Whatever region you’re in, margins for the insurance industry are tighter than ever. Operating expenses need to be as low as possible, and with so much competition, companies are constantly being forced to innovate their businesses, so there’s a lot of pressure that knocks on to technology. Then there’s the emergence of different channels – increasing amounts of direct business, with many customers just going straight through the internet.
In emerging markets such as Philippines, Vietnam, Myanmar, Thailand and Indonesia, as well as the Middle East, New entrants are very cautious to keep operating cost low with high speed-to-market, so they are beginning to outsource to the cloud to manage resources and processes.
I’ve seen a lot of companies moving into the cloud here in the last two years. Initially they tend to dip a toe in the water first by only putting non-critical processes on the cloud – ones that won’t be disruptive if they don’t work that day, such as human resources, financial accounting and procurement. For new entrants and small companies though, they are now thinking of putting their whole business onto the cloud: servicing and policy administration, management, claims and customer acquisition.
But why haven’t the multinationals followed yet? The reason for this is primarily security and regulatory concerns. Take privacy, for example certain countries will not allow companies to take data off their premises. The same concern works for storing and transferring data across borders too. A deal’s advantage comes from consolidating a platform across multiple territories, but certain countries won’t want their customer data being managed / stored outside country of origin.
The second concern is down time. If the service goes down for a few hours, the fear is that no one will have access to the information they need. It might be a concern, but it’s not the reality. There have been drastic changes in service level agreements. The real obstacles are regulatory. After all, you need just as sophisticated a back-up system if you keep data on premise as if it’s in the cloud.
So what’s the answer? Well, simply it is to work on educating regulators to help them make insurance more effective and more sustainable. We have a team in the US which is collecting the data requirements of the APJ region, then trying to work out which countries we can group together to make effective platforms to see where can we go, where can we consolidate and how can we work with the regulators.
Now let’s look at the commercial models and third parties. The way I see it, there are many cloud providers, but they offer only bits and pieces. At SAP we will be able to offer full complete solutions from Infrastructure / Innovative Technology bundled with Industry related full suite of Applications. SAP has also partners who can host applications using SAP Technology.
Adoption of Cloud is future. You need to start planning today if you want to be part of it.
To learn more about we can help you with your business challenges please have a look at SAP’s Solution Explorer for the Insurance Industry.
What do you think about the issues discussed here? Continue the conversation in the comments below and on Twitter @SAPforInsurance