Insurer uptake of cloud on the up despite continued legacy issues

This one of the key findings in a new survey conducted by Post in association with CSC throughout May and June, which also found that the need to stay on top of emerging technologies, changing demands and expectations of customers; and being locked into contracts and previous IT choices were the biggest barriers to reducing the complexity of IT estates.

Responding to the results, LV's group chief information officer Richard Warner - who used to work for a consulting business - said: "Historically, when I worked in strategy it was not unusual to see a 70/30 split for run and change and so on one hand I was surprised it had not moved and on the other it was fairly consistent with the numbers I saw many years ago."

He added: "We have migrated over time to somewhere between 50/50 and 45/55 with change being 45 and run being 55. But we are heading towards an equilibrium which is where I have been trying to get to."

When asked what areas they were focusing their change budget on the survey respondents rated client servicing (70%), new business (66%) and policy administration (64%) as the top three answers.

Despite the recent hype around the 'digital insurer', omni-channel (30%) and mobile (28%) feature far less prominently at seven and eight, although only 17% thought that the role of chief digital officer is a fad, with 38% believing it will become an increasingly important role within insurers.

Looking at which technologies the insurers were using to support key projects, packaged vendor software (57%); bespoke software built by your organisation (52%); and converged infrastructure (48%) were ranked as the top three answers.

Private cloud (45%), public cloud (19%) and hybrid cloud (17%) came fourth, sixth and seventh with the first figure a significant one according to CSC's industry general manager for insurance Patrick Molineux commenting: "The figure shows that cloud is not next year; it has arrived. Public cloud at 19% is starting to appear on the agenda but the high number for private cloud points to the fact insurers are embracing cloud."

Elsewhere, the survey found that 29% of respondents had increased their appetite for outsourcing over the last 12 months, with the figure rising to 43% for those using more core applications.

When asked what strategies the insurers were using to ensure projects contributed to improved efficiency, outsourcing (43%) came joint second, with in-house development (59%) and rationalising enterprise platforms (43%) the other top three answers. Just over a third (26%) mentioned renegotiating vendor contracts.

With regards IT budgets, one positive finding was that over half (52%) of respondents had seen their technology budget increase year-on-year, with 22% seeing a rise of over 10%.

Fifty people responded to the survey, including people with the titles chief information officer, head of IT, head of strategy, director of business change and IT solution architect.

To download the full report from Insurance Hound click here.